Negligent omissions

The two taxpayers sold three properties that they had owned jointly. Neither disclosed capital gains in their self assessment returns – which they said was because the gains were below the exemption and they had not realised the sums should be included on the tax documents.

One of the taxpayers claimed only or main residence relief in respect of one of the houses sold.

HMRC raised discovery assessments for both taxpayers and imposed penalties for carelessness.

The taxpayers appealed but the First-tier Tribunal decided they had been careless in omitting details of the gain in their returns and that Revenue was entitled to raise discovery assessments.

The method of calculation was disputed. The taxpayers argued the consideration should be the amount after deducting mortgage fees the mortgage redemption fee and legal costs.

The judge disagreed saying the figure was the price the buyers paid for the...