Q&As

X intends to obtain counsel’s opinion on whether X is deemed domiciled in the UK in the current tax year. To what extent would getting such an opinion mitigate any penalties that may apply as a result of counsel advising that X actually acquired a deemed domicile in an earlier tax year?

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Published on LexisPSL on 26/04/2019

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • X intends to obtain counsel’s opinion on whether X is deemed domiciled in the UK in the current tax year. To what extent would getting such an opinion mitigate any penalties that may apply as a result of counsel advising that X actually acquired a deemed domicile in an earlier tax year?
  • Failure to notify
  • Requirement to correct (RTC) offshore tax non-compliance
  • Inaccuracies in returns

X intends to obtain counsel’s opinion on whether X is deemed domiciled in the UK in the current tax year. To what extent would getting such an opinion mitigate any penalties that may apply as a result of counsel advising that X actually acquired a deemed domicile in an earlier tax year?

This Q&A does not consider the implications for the taxpayer of being deemed domiciled in the UK in respect to a particular tax.

Failure to notify

For information on the penalty regime for failure to notify HMRC of a liability to tax, see Practice Note: Penalties for failure to notify a liability to tax.

A non-deliberate failure to notify HMRC that tax is chargeable will not attract a penalty if the taxpayer has a reasonable excuse for the failure. For information on what constitutes ‘reasonable excuse’ see Practice Note: Penalties for failure to notify a liability to tax—reasonable excuse. It is important to note that the scope of the defence will vary from taxpayer to taxpayer: what is a reasonable excuse for one individual may not be reasonable for another—Rowland v HMRC.

The rate of penalty can be reduced if the taxpayer comes forward to inform HMRC about the failure to notify, and it can be reduced further by the nature and quality of the information and documentation provided to HMRC—see Practice Note: Penalty

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