Tax

David Duffy highlights the latest VAT cases and discusses recent VAT developments. Irish VAT updates  Brexit Omnibus Bill At the time of writing, it is uncertain whether the United Kingdom will exit the EU on 29 March either with or without a deal. However, given the risk of a no-deal Brexit, on 22 February 2019, the Irish Government released the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2019, more commonly known as the “Brexit Omnibus Bill”. The Bill contains a number of measures in relation to VAT. Most significant is the proposal to introduce postponed VAT accounting for imports of goods coming into Ireland from non-EU jurisdictions post-Brexit. Postponed VAT accounting means that Irish VAT registered businesses could account for VAT on imports of goods into Ireland from outside the EU in their VAT return rather than at the point of import. Where the business is also entitled to full input VAT recovery, a VAT cashflow cost would be avoided as the input VAT on the import would be deductible in the same VAT return. This is similar to the VAT rules applying to acquisitions of goods into Ireland from other EU countries. As well as helping avoid a VAT cashflow cost on post-Brexit imports from the UK, this measure would also apply to imports from other non-EU countries, thereby providing a cashflow saving compared to the current position. However, it is important to note that any customs duty arising on imports would generally still be payable at the point of importation unless a separate relieving measure applies. The Government indicated that postponed VAT accounting would initially be available to all traders for a period to alleviate immediate cash flow issues arising from Brexit. However, continued qualification for postponed accounting may depend on Revenue authorisation from a later date to be agreed and may be subject to certain criteria and conditions. The Bill also contains proposed changes to VAT legislation in respect of VAT56 authorisations. By way of background, a VAT56 authorisation allows qualifying taxpayers to buy-in most goods and services at the 0% rate of VAT. In order to qualify, the business must derive at least 75% of its annual turnover from 0% rated supplies of goods to other EU member states or to non-EU countries, or from certain supplies of contract work. The measures contained in the Bill appear to tighten the conditions to qualify for the authorisation and to give Revenue additional powers in cases where an authorised business no longer meets the conditions for the authorisation.  VAT rate on food supplements The last edition of VAT Matters advised of a proposed change in Revenue practice which was to result in the VAT rate for sales of certain food supplement products increasing from 0% to 23% with effect from 1 March 2019. Revenue has since confirmed in eBrief 034/19 that the current practice will remain unchanged until 1 November 2019. In the interim, the Minster for Finance will undertake a public consultation process to examine the policy and legislative options inthis area. Court of Justice of the EU (CJEU) VAT Updates VAT recovery for branches in the financial services sector In the financial services sector, it is common for companies to have branches in other countries which both support the head office’s activities as well as supply services to customers in those other countries. Given different interpretations and rules regarding the VAT exemption for financial services between EU member states, this can give rise to complex issues when considering the VAT recovery position of the branch. This was the case in Morgan Stanley (C-165/17), where Morgan Stanley’s French branch provided services to French customers and also supported its head office in the UK. The services supplied by the branch to its French customers were subject to VAT (as France has an option to tax for financial services). The support services to the UK head office were ignored for VAT purposes (as they were within the same legal entity) but were used to support activities which were VAT exempt in the UK. However, those services would have had VAT applied from a French perspective and, therefore, the French branch claimed full input VAT recovery on its costs. However, the French tax authorities challenged VAT recovery relating to Morgan Stanley’s activities carried on for the UK head office on the basis that the costs were used to provide services which were VAT exempt in the UK.  The CJEU concluded that the French branch could not recover VAT on costs which were used to support the VAT exempt services in the UK. The judgment also set out certain formulae to calculate the VAT recovery position for a branch’s general overhead costs. Therefore, the application of the judgment could be complex and would need to be carefully considered by businesses which have a head office or branches in other jurisdictions. Valuation of supplies In most cases, the amount which is subject to VAT on a supply of goods or services is clear cut. However, in cases where goods or services are provided in exchange or part exchange for other goods or services, the issue becomes more complex. In the A Oy case (C-410/17), the CJEU considered the taxable value of demolition services provided by A Oy to customers, where A Oy was able to sell on the scrap metal it removed from the customer’s site. The customer did not charge A Oy for the scrap materials, but A Oy factored the resale value of the scrap metal into the price of its demolition services. The question referred to the CJEU was whether there was a VATable supply of scrap metal supplied by the customer to A Oy and whether the taxable value of A Oy’s demolition services should also take account of the value of the scrap metal. The CJEU concluded that there was a VATable supply to A Oy and the value of this supply was the amount by which A Oy reduces the demolition price it charges. The fact that this may not be the same as the amount it gets for the scrap metal when it sells the metal is irrelevant. The value of the demolition services on which VAT was due was therefore the price paid by the customer for the demolition plus the value attributed by A Oy to the scrap when it works out the price to charge for demolition. In addition, A Oy was deemed to purchase the scrap metal and this supply was also subject to VAT under the reverse charge rules.  David Duffy FCA, AITI Chartered Tax Advisor is a VAT Partner at KPMG.

2019 will be a critical year in shaping the tax landscape for multinational corporations. 2018 was a busy year on the international tax front, with developments across the globe having an impact on Ireland, directly and indirectly. So, what can we expect in 2019 in terms of tax developments which could impact Ireland, directly or indirectly? Interest deductibility changes The Department of Finance has just completed a consultation phase around the EU ATAD (Directive) in respect of both hybrid instruments and interest deductibility rules. The interest deductibility rules are probably of most interest. Broadly, under a binding EU Directive, we are obliged to amend our interest deductibility rules so that allowable net interest will be restricted to 30% of earnings before interest, tax, depreciation and amortisation (EBITDA). As Ireland currently has very limited rules restricting the deductibility of interest, this is a significant change. It initially appeared that Ireland would have until 2024 before the new interest restrictions would be implemented. However, it now looks likely that the new rules could be in place by the end of this year. Companies may need to adjust existing tax cash flow models to factor in potential disallowable interest in the future. Grandfathering of existing loans will be limited, with loans taken out post-June 2016 within the ambit of the new provisions. The consultation phase is focusing on a number of issues, including carve-outs for certain activities and sectors, as well as how any de minimis limit (expected to be circa €3 million) will be legislated (for example, how group situations will be impacted). At the moment, there is uncertainty as to how the new rules will be implemented. How will a fully geared company with only rental income be impacted? Will there be a carve-out for infrastructure projects? There is some flexibility as to how countries implement the Directive; the hope is that Ireland chooses a sensible course. We will likely see the outcome of the consultation phase, and the resultant legislation, later this year. Transfer pricing There is a separate public consultation phase due to commence shortly in relation to transfer pricing (TP). This will cover various matters such as how Ireland will implement the updated OECD guidelines and whether TP should be extended to non-trading transactions. Irish TP legislation currently refers to 2010 OECD guidelines. One of the key changes in the 2017 guidelines is around value creation and the consideration that needs to be given to where value is created in allocating taxable profits. A greater focus on value creation activities could impact companies that carry out significant research and development (R&D) activities outside Ireland, amongst other things. How Ireland implements the new OECD guidelines could impact significantly on a company’s effective tax rate. One potential outcome of the new guidelines is that countries may compete for taxing rights over the same pool of profits. In the authors’ view, we are likely to face an environment of increased cross-border tax disputes, likely to last for several years. Later this year, in Finance Bill 2019, we will see the output of the consultation phase and the Department’s view on how best to implement the updated OECD guidelines. Regardless of the outcome of the consultation phase, there will be an increasing onus on companies to have appropriate and robust transfer pricing documentation in place to support their intra-group pricing policies. A unique feature of Ireland’s current TP regime is that TP does not extend to “non-trading” transactions, which would cover companies that, for example, might provide a limited number of (interest-free) intra-group loans. The expectation is that Ireland will move to change this, with TP in the future covering both trading and non-trading transactions. While it is expected that there will be an appropriate time-frame to unwind existing structures, or suitable grandfathering provisions, the changes may have a significant impact on Irish and international groups with interest-free loan structures in place. Digital tax The position in respect of digital tax is a moveable feast. At the time of writing, the potential for a consensus at European Union (EU) level looks low, which in some respects is a positive for Ireland, which stood to lose tax revenues from an EU-wide digital tax. However, we are already seeing individual countries, such as the UK, introduce unilateral digital tax equivalent measures. Such measures can reduce the attractiveness of our 12.5% tax regime. 2019 may see further developments at EU level on the digital tax front, or more likely an increase in the number of countries looking to implement their own digital tax regimes. The OCED has recently rowed heavily into this debate, which is likely to give significantly more impetus to proposed future changes. Unanimity over tax matters There has been talk at EU level of removing the current requirement for unanimity at EU level for the passing of tax changes. If, instead of unanimity, a qualified majority only was required to introduce tax changes, it would increase the likelihood of other EU changes being introduced. For example, the threat of a common consolidated corporate tax base (CCCTB) regime would increase, which would also erode the benefits of our low corporate tax rate. A change to the current unanimity rules would itself require unanimity, which at the moment seems most unlikely. However, it provides a good sense as to the direction in which the EU wishes to travel. In summary, we can expect significant further activity in 2019 on the international tax front that will be critical in shaping the landscape both for multinational corporations operating in Ireland and for indigenous Irish groups with overseas operations. Peter Vale is a Tax Partner at Grant Thornton Ireland. Paschal Comerford is a Tax Director at Grant Thornton Ireland.

By Cróna Clohisey The first pay cheques of the New Year will see the average Irish worker about €3 better off per week. However, these new gains could be wiped out with the increase in the rate of tourism VAT with consumers facing heftier bills in restaurants, hotels and hairdressers. The 9% rate introduced in 2011 was reinstated to its original rate of 13.5% from 1 January 2019. Ireland’s return to the rate of 13.5% means it is one of the highest rates of tourism VAT in the EU. Sixteen out of 19 eurozone countries have a rate of 10% or less while Northern Ireland has just undergone a consultation on whether it should reduce its rate from 20%. Brexit and associated Sterling fluctuations have also been mentioned as a reason for keeping the VAT rate at 9% in Ireland. Yet, visitors from the UK remain strong. The initial VAT rate drop was a temporary measure and at the time, businesses were warned that they must pass the savings on to customers. Now, tourism is booming and our value for money rating has improved. Tourism accounts for an estimated one in 10 jobs and has created employment opportunities all over the country. Despite good growth in Dublin and other cities, there are reports that rural areas are struggling despite seven years of the reduced VAT rate. A targeted support system to promote Ireland’s Hidden Heartlands and the Wild Atlantic Way, as well as funding to develop our greenways, was announced in Budget 2019.  Using a reduced VAT rate on an entire sector of the economy to encourage growth now seems to have been a blunt tool. Perhaps the targeted support approach is the right way forward. Time will tell.

Although entrepreneurs’ relief wasn’t abolished or capped in the 2018 budget, it is subject to additional conditions.   Entrepreneurs’ Relief (ER) is the fundamental capital gains tax (CGT) relief in the United Kingdom (UK). It replaced business asset taper relief in April 2008 and provides the opportunity to obtain a 10% CGT rate on gains from qualifying business disposals if certain conditions are met. The relief has gradually been extended to cover £10 million of lifetime gains. Prior to the autumn 2018 budget, there was concern that ER could be significantly capped or even abolished. The good news is that there were no changes to the overall value of ER, but the bad news is that there are now additional conditions which must be satisfied for ER to apply. Change effective from 6 April 2019 This change involves an increase from one year to two years in the qualifying period over which the necessary qualifying conditions must be met. Individuals who acquired a qualifying holding of shares between 6 April 2017 and 5 April 2018 will therefore be subject to the minimum holding period of one year provided the sale takes place on or before 5 April 2019. From 6 April 2019, however, those shares may then cease to meet the minimum holding period until the new two-year period is reached. This will require careful consideration regarding the timing of a sale. It is important to remember that entering into an unconditional contract represents the disposal date for CGT and not the completion date. Hence, could there be agreements entered into on 5 April 2019 with completion thereafter? Alternatively, there may be situations where the sales process is delayed until the two-year period is met and the use of option agreements may also be considered. Change effective from 29 October 2019 Changes have been made to the definition of a “personal company”. Two additional tests have also been introduced to ensure that the shareholder has a genuine economic interest in the shares being disposed. Previously, a personal company was one in which the individual held at least 5% of the ordinary share capital of the company and at least 5% of the voting rights. From 29 October 2018, the individual is also required to be: Beneficially entitled to at least 5% of the profits available for distribution to the equity holders of the company; and Beneficially entitled, on a winding up of the company, to at least 5% of the assets of the company available for distribution to equity holders. The proposed ER legislation broadly imports the definition of equity holders and assets available for distribution from the existing group relief provisions in chapter six of part five of Corporation Tax Act (CTA) 2010. This is a complex area and consideration will be required on a case-by-case basis. Where a company has issued convertible loan notes, debt securities with “equity-like” features or where the interest on the debt exceeds a commercial rate of return, for example, this will cause significant issues and a potential dilution of an individual shareholder in the “equity holders” pool, potentially bringing them below the 5% threshold. In determining assets available for distribution, the definition within Section 166 of CTA 2010 provides that assets available are the assets amount minus the liabilities amount. The problem with this definition is that internally generated goodwill or intellectual property is unlikely to be included in the assets amount. Companies with no net assets are assumed to have a sum of £100 to distribute. It is also likely to cause problems for shareholders with entitlement to growth or freezer shares and may also cause problems where there are “alphabet” shares in the company, depending upon the rights attaching to them in the articles. These changes do not impact enterprise management inventive (EMI) shares. Further change from 21 December 2018 Given the complexity of the new rules introduced on budget day, a late proposed amendment to the legislation has been made inserting an alternative test to the two new 5% economic tests. This new test requires that, on the date of disposal, the selling shareholder would have been entitled to 5% of the proceeds in the event of a hypothetical sale of all of the company’s ordinary share capital on that day. This test is good news, especially for companies with alphabet shares, and it is likely that when individuals look to consider if ER is available, they will first consider if this test is met in priority to the other alternative economic tests. Conclusion Following these changes, the assessment of whether ER is available will be significantly more complex. It will be important to consider the interaction of these changes from budget day, 21 December 2018 and 6 April 2019 and establish what possible planning can ensure the future availability of ER. The above represents a short overview of the proposed new rules and may be subject to further changes as the Finance Bill proceeds through Parliament. Specific advice should be sought in advance of any proposed transaction. Kate Hamilton is a Senior Tax Manager at BDO Northern Ireland.

David Duffy highlights the latest VAT cases and discusses recent VAT developments. IRISH VAT UPDATES Revenue guidance updates eBrief 218/18, issued on 27 December 2018, contained links to a number of new and updated sections of Revenue’s VAT Tax and Duty Manual. This includes: Confirmation of a change in Revenue practice, which will result in the VAT rate for sales of certain food supplement products increasing from 0% to 23% with effect from 1 March 2019; Confirmation of a change in Revenue practice, which will result in the application of 0% VAT to sales of rollators with effect from 1 March 2019. A rollator is a device, equipped with wheels, used by persons with a disability or infirm people for support while walking; Refreshed or updated guidance on the VAT rules applicable in certain sectors including opticians, staff canteens, pharmacists and personal contract plans (PCPs); and New guidance on changes to the VAT treatment of vouchers (see below for more detail). Vouchers New VAT regulations (Statutory Instrument No. 582 of 2018) were published in December 2018, which update the Irish VAT law applicable to transactions involving vouchers. The regulations apply to vouchers issued from 1 January 2019 onwards. This update is in line with the harmonisation of the VAT rules for transactions involving vouchers across all EU member states. The new legislation defines the meaning of a voucher for VAT purposes and distinguishes between two types of vouchers for VAT purposes: single purpose vouchers and multi-purpose vouchers. A single-purpose voucher (SPV) is one where the place of supply (i.e. the jurisdiction where VAT is due) of the goods or services to which the voucher relates, and the amount of VAT due on those goods or services, are known at the time of the issue of the voucher. VAT will be due by the seller of the SPV in the VAT return for the period during which the SPV is sold based on the VAT rate of the good or service against which the voucher can be redeemed. A multi-purpose voucher (MPV) is a voucher other than a single-purpose voucher. This would include a voucher that can be redeemed against goods and services in more than one jurisdiction or at different VAT rates. For example, a voucher for a supermarket would typically be an MPV as the voucher can redeemed against products at a number of different VAT rates. VAT will be due on an MPV at the time of redemption of the voucher and the VAT rate will be determined by the goods or services against which the voucher is redeemed. Businesses that sell vouchers will need to review their business to determine whether they are selling an SPV or MPV, and apply the VAT treatment accordingly. VAT refund scheme for charities In Budget 2018, the Minister for Finance announced a refund scheme for charities in respect of VAT incurred by them from 1 January 2018 onwards. Qualifying charities are now entitled to submit an annual claim for VAT incurred during 2018. The deadline for making such claims in respect of 2018 is 30 June 2019. eBrief 219/18 contains guidelines for the procedures for making such claims. In order to qualify for the scheme, a charity must hold a charitable tax exemption from Revenue and be registered with the Charities Regulatory Authority at the date of the claim and the date the expenditure was incurred. Charities will be entitled to apply for a refund of a proportion of their VAT based on the level of non-public funding they receive out of total funding. Revenue’s guidance sets out the method for calculating a refund claim and the process for submitting the claim to Revenue. There is an overall cap of €5 million for this scheme across the charity sector in respect of claims made in 2019, which will be allocated on a pro-rata basis for qualifying claims. EU VAT CASE LAW UPDATES Termination payments  In MEO (C-295/17), the Court of Justice of the European Union (CJEU) ruled that payments a telecom company was contractually entitled to receive as a result of the early termination of a customer’s contract were subject to VAT. The CJEU rejected the argument that they were non-VATable compensation. In the facts of the case, the telecom company offered contracts under which customers paid lower prices in return for agreeing to a minimum contract period. The contract provided that where the customer defaulted and his/her contract was terminated, the customer owed a lump sum termination amount equal to the net monthly instalments for the number of remaining months in the contract period. According to the CJEU, this termination payment was not a compensation for damages and therefore, was subject to VAT. While the judgment is not available in English, the CJEU’s decision appears to be based on the termination amount being specified in the contract and the fact that the telecom company ended up in the same position as if the contract ran for the full duration. It is still possible that payments which amount to compensation can be outside the scope of VAT, but this judgment highlights that the exact fact pattern and contractual arrangements are important in determining the VAT treatment. Conditional payments  The Baumgarten case (C-548/17) considers when VAT becomes due in a scenario where there are multiple payments that are conditional on future events. The default rule is that VAT becomes due on a supply of goods or services when they are supplied. However, there are exceptions which allow for VAT to be due at a later date where successive payments are made in respect of those goods or services. In this case, the CJEU ruled that the supply of a service by a football agent to football clubs, which was paid for in later instalments that were conditional upon future events, became subject to VAT when the payments were made rather than when the service was initially performed. Baumgarten was a professional agent, which placed professional footballers with German football clubs. When Baumgarten successfully placed a player with a football club, it became entitled to commission from that club provided the player subsequently signed an employment contract and held a licence issued by the German Football League. This commission was paid to Baumgarten in instalments every six months after the player joined the club, for as long as the player remained under a contract with that club and held a German Football League licence. While the service of placing the footballer took place on day one, it was paid for over the duration of the player’s contract and the exact amount due was conditional. The taxpayer argued that VAT should be payable on each payment as and when it became due. The German Tax Authorities, however, argued that VAT was due upfront on the full amount that would be due over the term of the contract. The CJEU decided that, as the full amount of the payments to be made is conditional, the VAT on those payments became due on the expiry of the periods to which the payments made relate. David Duffy is a VAT Partner at KPMG.

EY’s Helen Byrne, Sherena Deveney and Brendan McSparran outline the relevant compliance dates for February and March. REPUBLIC OF IRELAND RELEVANT DATES FOR COMPANIES 14 February 2019 Dividend withholding tax return filing and payment date for distributions made in January 2019. 21 February 2019 Due date for payment of preliminary tax for companies with a financial year ended 31 March 2019. If this is paid using Revenue Online Service (ROS), this date is extended to 23 February 2019. Due date for payment of initial instalments of preliminary tax for companies (not “small” companies) with a financial year ended 31 August 2019. If this is paid using ROS, this date is extended to 23 February 2019. 23 February 2019 Last date for filing corporation tax return Form CT1 for companies with a financial year ending on 31 May 2018 if filed using ROS. Due date for any balancing payment in respect of the same accounting period. Loans advanced to participators in a close company in the year ended 31 May 2018 may need to be repaid by 23 February 2019 to avoid the assessment (on the company) of income tax thereon. A concessional three-month filing extension for iXBRL financial statements (not Form CT1) may apply. For 28 February 2018 year-ends, this should extend the iXBRLW to 23 February 2019. 28 February 2019 Last date for filing third-party payments return Form 46G for companies with a financial year ending on 31 May 2018. Latest date for payment of dividends for the period ended 31 August 2017 to avoid Sections 440 and 441 TCA97 surcharges on investment, rental or professional services income arising in that period (close companies only). Country by Country Reports (CbCRs)/Equivalent CbCRs for the fiscal year ended 28 February 2018 (where necessary) must be filed with Revenue no later than 28 February 2019. 14 March 2019 Dividend withholding tax return filing and payment date for distributions made in February 2019. 21 March 2019 Due date for payment of preliminary tax for companies with a financial year ended 30 April 2019. If this is paid using ROS, this date is extended to 23 March 2019. Due date for payment of initial instalments of preliminary tax for companies (not “small” companies) with a financial year ended 30 September 2019. If this is paid using ROS, this date is extended to 23 March 2019. 23 March 2019 Last date for filing corporation tax return Form CT1 for companies with a financial year ending on 30 June 2018 if filed using ROS. Due date for any balancing payment in respect of the same accounting period. Loans advanced to participators in a close company in the year ended 30 June 2018 may need to be repaid by 23 March 2019 to avoid the assessment (on the company) of income tax thereon. A concessional three-month filing extension for iXBRL financial statements (not Form CT1) may apply. For 31 March 2018 year-ends, this should extend the iXBRL deadline to 23 March 2019. 31 March 2019 Last date for filing third-party payments return Form 46G for companies with a financial year ending on 30 June 2018. Latest date for payment of dividends for the period ended 30 September 2017 to avoid Sections 440 and 441 TCA97 surcharges on investment, rental or professional services income arising in that period (close companies only). CbCRs/Equivalent CbCRs for the fiscal year ended 31 March 2018 (where necessary) must be filed with Revenue no later than 31 March 2019. PERSONAL TAXES  31 March 2019 Deadline for claiming separate assessment and nominating assessable spouse for 2019.  GENERAL 23 February 2019 P35 deadline for employers for 2018 (assuming returns and tax payments are made through ROS). Due date for Special Assignee Relief Programme employer returns for 2018. 31 March 2019 Return of information in relation to share options or rights granted in the year ended 31 December 2018. A similar deadline applies in connection with reporting obligations for forfeitable and convertible shares given to employees and directors. NORTHERN IRELAND RELEVANT DATES FOR COMPANIES The key dates for corporation tax purposes will, in most instances, depend on a company’s accounting period end date. The dates below are for a company with a 12 month accounting period ended 31 December 2018. 14 January 2019 Due date for third quarterly instalment payment for “large” companies.  A “large” company is defined as having total taxable profits in excess of the upper limit (being £1.5 million divided by the number of 51% group companies plus one and adjusted accordingly for length of period). PERSONAL TAXES 31 January 2019 Deadline for submission of tax return (individuals, partnerships and trusts) for 2017/18 by internet filing, with a £100 penalty for failure.  All tax due for 2017/18 to be paid by this date.  First payment on account towards the taxpayers 2018/19 liability is due.  Deadline for amending the 2016/2017 tax return. Note that amending the tax return, will extend the enquiry period by 12 months from the end of the quarter period of submission. Quarters run April, July, October and January. Any 2016/17 tax returns submitted after this date will be subject to a penalty amounting to the higher of £300 or 5% of the tax due for the year. This can be increased to as much as £3,000 or 100% of the tax due if HMRC consider that an individual is deliberately not filing the tax return.  Any tax for 2016/17 not paid by this date will be subject to a 5% penalty (in addition to an interest charge).  The trustees of all relevant trusts and complex estates that have incurred a liability for any relevant tax in the tax year 2017/2018 must register beneficial ownership information about the trust on TRS, by no later than 31 January 2019, if they have not already done so.    Relevant taxes are: Capital gains tax; Income tax; Inheritance tax; Land and buildings transaction tax (in Scotland); Stamp duty land tax; and Stamp duty reserve tax or stamp duty. The lead trustee may have to pay a penalty if they do not register the trust before the registration deadline. If they do not register or update the information, and cannot show HMRC that they took reasonable steps to do so, the penalties are: £100 for registering up to three months after the deadline; £200 for registering between three to six months after the deadline; and £300 or 5% of the total tax liability in the relevant year (whichever is higher) for registering more than six months after the deadline. Penalties will not be issued automatically and will be reviewed on a case-by-case basis.   Note that if the trustees incurred income tax or capital gains tax liabilities in 2016/2017 they should already have registered. If you have sold or disposed of a UK residential property after 5 April 2015 and are a: Non-resident individual; Personal representative of a non-resident who has died; Non-resident who’s in a partnership; Non-resident landlord; Non-resident trustee; Non-resident company or fund; and UK resident meeting split year conditions and the disposal is made in the overseas part of the tax year. You have 30 days from the date of conveyance to report your disposal on the non-resident Capital Gains Tax return, and pay any tax due.  If you do not submit and pay HMRC by the deadline you may have to pay a penalty and interest both on the late filing of the return and late payment of any tax due. Penalties for missed deadlines: £100 if up to six months late; A further penalty of £300 or 5% of any tax due, whichever is greater, if more than six months; and A further penalty of £300 or 5% of any tax due, whichever is greater, more than 12 months. If any non-resident capital gains tax remains unpaid after 31 January after the end of the tax year of the disposal, a late payment penalty of 5% of the tax outstanding will be charged. There are exceptions to the pay now rule if you already have an existing relationship with HMRC – for example, through Self Assessment. If you do, you can either: Pay when you submit your non-resident Capital Gains Tax return; or Defer payment until your normal due payment date through Self Assessment (i.e.31 January following the tax year of disposal). 2 March 2019 Any tax due in respect of 2017/18 and not paid by this date will be subject to a 5% penalty (in addition to an interest charge).