Taxpayers who live abroad may sell UK property. Before 6 April 2015 any gains they made would have escaped UK tax. Now such non – resident property owners must pay non-resident capital gains tax (NRCGT) on gains made on UK residential property, but not (yet) on gains made from commercial property.
The gain or loss made by a non-resident owner must be reported on an NRCGT return, submitted online to HMRC within 30 days of the completion of the contract. This tight deadline has caught out many taxpayers, especially for sales in 2015 – 16 when the reporting rules were not widely understood.
The NRCGT return must be submitted even if the taxpayer is also required to submit a UK self assessment tax return, which would include a report of the gain. Where the property was previously the taxpayer’s own home, the gain may be subject to tax reliefs so no tax is payable, but the NRCGT return must still be submitted with 30 days.
If the NRCGT return is late, the normal late filing penalties apply, which can mean penalties of £1,300 can rack up before the taxpayer is aware they are late with reporting the disposal. If you have received such a penalty, you can challenge it.
A recent case decided that it was not reasonable for the taxpayer to be expected to read an obscure publication about the NRCGT return posted on HMRC’s website on 6 April 2015. HMRC had made no effort to inform taxpayers or tax agents about the new form and the new filing deadline.
If you have received a penalty for not submitting the NRCGT form on time we can help you appeal, on the basis that you had a reasonable excuse for lateness.