Commentary

A4.568B Reasonable excuse—ignorance of the law and areas of legal uncertainty or complexity

Administration and compliance

A4.568B Reasonable excuse—ignorance of the law and areas of legal uncertainty or complexity

A4.568B Reasonable excuse—ignorance of the law and areas of legal uncertainty or complexity

Ignorance of the law and taxpayers' reliance upon it alone as a reasonable excuse is one area in which the tribunals have produced inconsistent judgments.

Differences of opinion on this matter have come to light, particularly in the context of non-resident capital gains tax (NRCGT) returns and the high income child benefit charge (HICBC), with many taxpayers challenging penalties on the basis they were unaware of the change in the law. These are discussed under 'Whether taxpayers can rely on ignorance as a reasonable excuse in relation to new tax regimes' below.

Can ignorance of the law be a reasonable excuse?

It is generally the case that the Tribunal considers ignorance of the law not to be an excuse, in that Parliament must have intended to enact law for it to be complied with and not to favour those who remain ignorant of it over those who seek to understand the law and to comply with it.

However, the rule that 'ignorance of the law is no excuse' is considered to be less than absolute and that it might constitute a reasonable excuse where complex or uncertain law is concerned. Indeed, in Perrin1, in which ignorance of the law was not relevant to the particular facts of the reasonable excuse case, the judgment nevertheless considered this point:

'82. One situation that can sometimes cause difficulties is when the taxpayer's asserted reasonable excuse is purely that he/she did not know of the

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