Non-residents sale of property

Anyone got fined for not reporting the CGT in 30 days?

Didn't find your answer?

I have had a couple of non-resident clients now who have sold a UK property and first I have heard about it is tax return time so its not been reported to HMRC within the 30 day time limit.

Has anyone seen any attempt by HMRC to police this area?  I cant imagine they care so long as they get the tax on the self assessment tax return, but tehcnially the penalaties are listed as "the same as self assesment" on the .gov page:

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-resid...

However for SA you cant get penalised unless HMRC have issued a tax return.  In this instance, there clearly is no return issued, so I am wondering if they actually have any powers to enforce this, or its like the failure ot notify for a tax return which is never ever levied. 

Just wondering what to tell the client I am doing now, he sold in April last year, so that would be a whopping 12 months late on the notification.   I had two similiar last year, and not a murmour from HMRC after the SA went in.  The correct tax was paid by the correct date in both cases.

Replies (8)

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By JulieY
26th May 2017 13:51

We have 3 clients with such disposals. All 3 have been penalised for late Non-Res CGT returns despite SA returns being submitted on time and no tax due.

We have appealed all 3 penalties, but no response from HMRC yet. In a chase-up call, they said the appeal was recorded as received, but they can't say where it is and they need to trace it.

The most baffling postal system in the world?

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Replying to JulieY:
By Tim Vane
26th May 2017 14:17

What were your grounds for appealing? Surely late is late?

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By jon_griffey
26th May 2017 14:39

I had one client that got a penalty. Successfully appealed. Grounds were along the lines that (i) he was non-resident so cannot be expected to be up to date with UK tax (ii) it is very new and everybody is getting to grips with it (iii) his solicitor who dealt with the conveyance should have told him about it (iv) he was in SA anyway and so assumed he would report it in the normal way (v) it was exempt anyway due to PPR.

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Replying to jon_griffey:
By Ruddles
26th May 2017 16:18

I had one for an Australian company that sold its only UK property. Appealed (on similar grounds to the above except for the PPR point), HMRC said no, so they've been told to go and try and collect the £100 from an Australian company that no longer exists. I've heard nothing since. (No, we shouldn't have already made the client aware because we weren't acting at the time of the disposal. As for the solicitor, well ...)

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By Dick Stastey
27th May 2017 11:22

In relation to the abject failure by solicitors to advise their clients, we have the same experience with ATED returns on purchases too. Fortunately in most cases on of the exemptions applies and HMRC appear not to pursue penalties in those instances.

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Replying to Dick Stastey:
By jon_griffey
31st May 2017 08:31

Dick Stastey wrote:

In relation to the abject failure by solicitors to advise their clients, we have the same experience with ATED returns on purchases too. Fortunately in most cases on of the exemptions applies and HMRC appear not to pursue penalties in those instances.

I would suggest that anyone that acts for solicitors/licenced conveyancers warns them about the NRCGT form as they seem to be blissfully unaware of it but WILL be the first to get blamed if the client gets a penalty.

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accountant in london
By Accountant in London
28th May 2017 16:15

I have a client who had to file the NRCGT in Jan 2016.
I didnt know about the transaction until April 2016 when I queried the client regarding filling the ATED return.
Its only then that they inform me that they have transferred the property 'in specie' to the shareholder to avoid the ATED charge.
That's fine. I processed the ATED refund for the period btn Jan-March 2016. However, NRCGT was late.
But there was time till 31/01/17 to file ATED related CGT, so this was not late.

I appealed the penalty for late filling NRCGT. It took HMRC 2 months to come back and say that they can't deal with it because this NRCGT does not belong to an individual. Without NI or UTR it can't be processed. ( i was like WTF!!). They could clearly use the NRCGT case reference.

SO i had to send it back. Then it took them 9 months to reject the appeal.
Earlier this year i send it for review of the appeal.
They just wrote back (15/05/17) to confirm that they removed the daily penalty.

This is what she writes : ' On a further note, I have recently been advised a review has taken place regarding issue of daily penalties for NRCGT returns, which are raised at HMRC's discretion. I can advice the position has changed following a review of representations from a number of customers and agents. I can confirm HMRC will no longer be issuing daily penalties for late NRCGT returns and all daily penalties raised for NRCGT are being withdrawn.

Therefore, on this basis i have cancelled the proportion of this penalty that arose from the daily penalties. The fixed penalty of £100, the raising of which HMRC does not have power to exercise discretion, remain due and payable.'

My appeal grounds were:

1. No notice to file was received.
I though this was a good point because a notice to file for ATED CGT was received but not the NRCGT.

2. A non-resident taxpayer will not have basic knowledge of UK tax law, especially a fairly new law that not been communicated well to UK tax advisers and UK solicitors.

She addressed no. 2 by saying that it has been communicated very well and as a tax agent I should have known. However she missed the point that UK solicitors who handle the transfer/sale of property are not tax agents.

I raised this with her.

and as way of additional information, quoted a tribunal cases in which a taxpayer successfully appealed against the penalties because it was not their fault but the accountant's. So there was reasonable excuse for the tp.

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