First-tier Tribunal (Tax)

[2010] UKFTT 309 (TC)

TC00596

Appeal number: TC/2010/00215

 

Stamp Duty Land Tax – failure to file land transaction return – penalty – reasonable excuse – unrepresented tenant did not know of obligation to file return and was not informed by landlord, solicitors or HMRC – whether reasonable excuse – no – appeal dismissed.

 

FIRST-TIER TRIBUNAL

TAX

 

CHRISTOPHER RYAN

Appellant

 

-and-

 

THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS (SDLT)

Respondents

 

 

TRIBUNAL:

KEVIN POOLE  (TRIBUNAL JUDGE) GORDON MARJORAM

 

Decision under the provisions of Rule 26 of the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009 following determination without a hearing, incorporating full written findings of fact and reasons.

(Original decision (incorporating summary findings of fact and reasons) released on 4 May 2010 following determination without a hearing.)

 

 

 

© CROWN COPYRIGHT 2010

DECISION

 

1.       The Appellant completed a lease (as tenant) on 24 May 2007 and became obliged to render a land transaction return as a result under s 76 Finance Act 2003 (“FA 03”) no later than 23 June 2007.  He in fact rendered a return on 26 June 2009.  Without giving any details of it, HMRC state (and the Appellant has not denied) that the transaction in question was a “notifiable transaction” under s 77 FA 03.

2.       HMRC imposed a fixed penalty in respect of the default under paragraph 3 of Schedule 10 to FA 03 by notice issued on 31 July 2009.

3.       The Appellant appealed against the penalty on the grounds that he was not aware of the obligation to make a land transaction return and nobody had notified him of that obligation – “I feel more should be done to alert people to the fact that there are penalties for not registering leases on time and at the moment I feel it is kept very quiet and another way of making money.”  He also said that his business had closed after just 7 months and he had lost a lot of money.  In his reply to HMRC’s Statement of Case, he said “I feel badly let down by people that should of told me of any penalties for not registering the lease on time including HMRC and Solicitors involved in the lease transfer.”

4.       Section 97(2) FA 03 states:

“(2) Where a person had a reasonable excuse for not doing anything required to be done for the purposes of this Part

(a) he shall be deemed not to have failed to do it unless the excuse ceased, and

(b) after the excuse ceased, he shall be deemed not to have failed to do it if he did it without unreasonable delay after the excuse had ceased.”

5.       The Appellant must therefore be taken to be submitting that he had a reasonable excuse as a result of his lack of knowledge of the requirement to make the return and as a result of the failure of any other person to inform him of that requirement.

6.       Although the Tribunal sympathises with the Appellant’s business misfortune, it does not feel the Appellant has demonstrated any justifiable reliance on third parties that could give rise to a reasonable excuse for his default.  His reference to “Solicitors involved in the lease transfer” does not include any allegation that he had instructed and relied on solicitors to advise him on the grant of the lease, so the Tribunal infers that he is arguing the landlord’s solicitors should have advised him – which the Tribunal does not consider to be justified.  He does not explain how he considers HMRC should even have been aware that he had taken part in a notifiable transaction, and even if they were so aware, the Tribunal does not consider they would have had a duty to advise him of his obligations.

7.       In all the circumstances, the Tribunal is regrettably unable to find a reasonable excuse existed for the Appellant’s default, and accordingly the appeal fails and the penalty must be confirmed.

8.       This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.   The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

 

 

TRIBUNAL JUDGE

RELEASE DATE: 6 July/2010