Taxpayer’s confusion was understandable

The taxpayer who had never been to the UK agreed to buy a car park lot at Glasgow airport as an investment. It produced income of £1 600 a year for two years but nothing after that. Eventually the business went into administration and the taxpayer lost her money. When she took on the investment the promoter told her that she would not be liable to UK tax because the income was less than her personal allowance. Further she would be able to claim relief from tax deducted at source by submitting a non-resident landlord form which she did.

After considerable correspondence and confusion during which time HMRC informed the taxpayer that as a non-EU citizen she was not entitled to the personal allowance HMRC imposed penalties for a late filed self-assessment return.

The First-tier Tribunal agreed with HMRC that based on the...