The chargeable gain on the disposal of a property could not be reduced by a mortgage redemption payment, and penalties were due for a careless inaccuracy in the taxpayer’s self-assessment return 

The appellant’s father inherited a property (PP) from his late partner in April 2006, when it was valued at £375,000. In May 2007, a deed of variation of his father’s partner’s will was effected under which his father held the property on bare trust as to 50% for the appellant and 50% shared between other family members. 

The appellant’s father remained living in PP until he died. His father took out a mortgage over PP in August 2009. The mortgage funds were used: (a) £325,000 to acquire an extension of the lease of PP; and (b) The remainder to fund the appellant’s father’s living and care costs.  

After the appellant’s father’s death, PP was sold to an independent third