Since April 2015 non-residents selling UK residential property have been required to report the disposals within a Non-resident Capital Gains Tax return within 30 days of the conveyance. You can view HMRC’s guidance here
The timeframe is very tight – some may think unreasonably so, especially since many individuals are unaware of this requirement until they contact us for advice on their tax position, often long after the 30 day time limit has passed.
Whilst we can act quickly, penalties for late submission inevitably ensue, even where no tax is payable, perhaps due to the availability of reliefs. And these penalties can be substantial – a fixed penalty of £100 at the very least , plus daily penalties of £10 if the return is more than 3 months late. We have seen a number of hefty penalties notices issued, completely disproportionate to the amount of tax involved.
Following repeated representations from agents, tax-payers and professional bodes, HMRC have finally relaxed their position to some degree. They have announced that they will no longer charge the £10 daily penalties and that past penalties will be withdrawn. Whether they will automatically rescind penalty notices previously issued and repay amounts settled is not clear, however. I suspect that those affected will need to instigate repayments by contacting HMRC.
If you need advice on your UK tax compliance obligations as a non-UK resident, please contact our private client tax department.