NRCGT penalty

In July 2016 I found out that my client (who lives in Indonesia) had sold a UK buy to let property in October 2015.  I immediately sent in a NRCGT return online.  He now has a penalty notice for £1,300 for not sending in the return within 30 days of the conveyance.  The gain returned is £204.  The fine seems to me to be disproportionate and unjust because he, not unreasonably, expected to return the details of the gain on his 2016 tax return in the normal way.  With hindsight I can see that I should have flagged this up just because he is a non resident landlord in case he happened to want to sell a property.  I am looking for reasonable excuses to appeal this and pointed out that knowing he is non resident his solicitor should have warned him about the 30 days.  The solicitor is well respected locally and has replied candidly that he knew nothing about the 30 day time limit and to be fair neither did I at the start of the 2015-16 tax year.  I know that not knowing the rules is no excuse but this seems so unfair.  If professionals don’t know about new online reporting rules how can the tax payer in Indonesia (where communications are not the best) be expected to know?  Is there any way to challenge this and is anyone else in the same boat?

  • In reply to Nicholas Jacob:

    If you are a french tx resident selling your UK property you should have a look to the French/UK tax treaty. Be careful not to be taxed in both countries...For more details you can have a look here https://avocatdroitfiscal.paris/fiscalite-internationale That is on this website I discovered the double taxation rule and the necessity to file certain French tax papers in order not to be double taxed.

  • Anonymous
    Anonymous

    In reply to Kate:

    I have copied below the NRCGT return late filing statistics for the five month period to 30 June 2017. They show nearly one third of all returns submitted in this period were filed late. The actual percentage must surely be higher with individuals either still unaware of the filing obligation or incorrectly having decided to attempt to fly under HMRC's radar given the draconian penalty regime in place.

    I can confirm that HMRC holds some information which falls within the scope of your request. NRCGT data is now only available on a quarter end basis. For the five month period 1 February to 30 June 2017 the information you have requested is as follows:

     The number of NRCGT returns filed = 6,897
     The number of the above returns that were filed late = 2,159
     The number of late filing penalties charged = 1,494

    There is a difference between the second and third figures due to internal process delays. HMRC is currently processing those NRCGT returns received late and will apply penalties, in accordance with the relevant legislation, in due course. Penalties can be appealed where there is a reasonable excuse for filing the return late.

    For those of you who have not yet read Lee Sharpe's humorous summary of the birth of this new reporting regime, enjoy the following:

    Hey, chaps! I have an absolutely whizzer idea! Let’s make taxpayers fill in forms whose only purpose is to tell us about other forms they’re going to be filling in later. So if they don’t tell us about the forms they’re going to be filling in, then we can penalise them for not filling in the first form about the second form. But to make this really work, we need to make this new form about something really obscure, so that nobody will realise the new form applies to them until it’s too late. Now, all we need is some new tax measure that quietly overturns principles that have applied for decades…”

    Sadly for 2,159 people in the 5 month period to 30 June 2017, the reality may be a £700 penalty which could have been £1,600 but for public pressure. Mr Hammond, surely you can improve on this mess left by your predecessor?