Summary
The disposal of a property was held to give rise to a capital gains tax charge as opposed to being an adventure in the nature of the trade, and penalties for failure to notify chargeability and negligently submitting an incorrect tax return were increased.
Background
The appellant purchased a residential property in June 2005, and initially intended to move into it as her residence. The property was substantially redeveloped before being sold at a gain in May 2007. The appellant did not notify HM Revenue and Customs (HMRC) of chargeability on disposal of the property. When the appellant did file her tax return for 2007/08, she reported a capital gain (although she later changed her position).
Following an enquiry into the tax return, HMRC increased the tax upon re-computing the capital gain, charged a penalty for failure to
