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Taxpayer Had Reasonable Excuse For Late Payment Of Tax

By Mark McLaughlin, April 2017
The taxpayer’s insufficiency of funds due to a reason outside his control was a reasonable excuse for the late payment of a capital gains tax liability, and his appeal against a penalty for late payment of that liability was allowed.

The appellant owned a portfolio of buy-to-let properties funded by Royal Bank of Scotland (RBS). He had a flexible business loan with RBS secured by charges on each property. On 23 September 2014, the appellant sold one of those properties for £112,816 (after expenses). RBS insisted on repayment of 100% of the gross sale proceeds of £115,000 before the legal charge on the property was discharged. 

The appellant also had an investment savings policy, which matured on 27 February 2016. He received the proceeds of £21,555.34 on 7 March 2016, and paid HM Revenue and Customs (HMRC) two instalments of £6,394.89 and £10,000 on 9 and 10 March 2016 from his HSBC bank
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