Pankaj Kothari v The Commissioners for HMRC [2026] UKFTT 1035 (TC)

[2026] UKFTT 01035 (TC)Case No TC 09954
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 21 November 2025Date Judgment date: 09 July 2026
By remote video hearing
Appeal reference: TC/2025/00295
Capital Gains Tax – Late Payment Penalty – Reasonable Excuse – Insufficiency of funds, reasons for the insufficiency
and 30 June 2026
Before
TRIBUNAL JUDGE MATHEU SMITHMEMBER DEREK ROBERTSON
Between
PANKAJ KOTHARIAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentMr Pankaj Kothari represented himself for AppellantMr Zeeshan Chaudhry litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction

[1]The form of the hearing was Video with all parties and the Tribunal attending remotely via Microsoft Teams.[2]Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings. As such, the hearing was held in public.[3]The documents to which we were referred were:(1) A 181-page hearing bundle prepared by HMRC which included Mr Kothari’s Notice of Appeal, various documents and authorities.(2) A 97-page supplementary bundle which included further written representations by both parties and further documents provided by both parties pursuant to the directions released on 24 November 2025.(3) Mr Kothari’s final written submissions, which were filed and served shortly before the hearing.(4) HMRC’s original statement of reasons 07 April 2025.[4]During the hearing Mr Kothari gave evidence and was cross-examined by HMRC. We also asked him questions.[5]Mr Kothari appealed against a late payment penalty of £12,047 (the “Penalty”) charged under Schedule 56 of the Finance Act 2009 (“Sch. 56”in respect of the late payment of Capital Gains Tax (“CGT”) for the tax year ended 5 April 2022 (“21/22”).[6]First, HMRC must satisfy us that the Penalties were correctly charged. If HMRC achieves that, it is for Mr Kothari to satisfy us that he had a reasonable excuse for the late payment such that the Penalty must be set aside pursuant to paragraph 16 of Sch. 56 and/or that the Penalty should be reduced because of special circumstances pursuant to paragraphs 9 and 15(3) of Sch. 56.[7]The hearing of this Appeal began on 21 November 2025. At that hearing it was established that there was no dispute that the relevant CGT was paid late. Mr Kothari asserted he had a reasonable excuse for the late payment on the basis that he could not have raised the funds to pay it any earlier than he did. A crucial issue was therefore whether Mr Kothari could show the insufficiency of funds was attributable to events outside his control, as required by paragraph 16(2) of Sch. 56. Unfortunately, crucial documentation had not been included in the hearing bundle and so the hearing was adjourned part heard with directions made requiring the parties to provide any further documents on which they wished to rely and written representations on this issue. Written directions to that effect were released on 24 November 2025.[8]The parties then provided extensive written representations and whatever additional documents they wished to rely upon when the hearing of this appeal resumed on 30 June 2026.[9]When making findings of fact we must apply the ordinary civil standard of proof, being the balance of probabilities.

Was the penalty correctly charged?

[10]At the hearing on 21 November 2025 it had been established that:(1) On 14 February 2024 HMRC issued a Closure Notice to Mr Kothari ending its enquiry into his self-assessment tax return for 21/22. The closure notice amended his return such that CGT of £240,964.20 was payable.(2) That CGT was due to be paid by 16 March 2024 but was paid late.(3) The penalty under appeal was imposed pursuant to Sch. 56 when the CGT had not been paid within 30 days of the due date, that is by 15 April 2024.(4) The amount of the penalty is as prescribed by Sch. 56, and the penalty had been notified to Mr Kothari.[11]When the hearing resumed on 30 June 2025 it was established that the CGT had been paid by instalments. An initial payment of £5,000 was made on 29 May 2024, that is 73 days late. The rest was paid in five further instalments paid between 10 and 12 July 2024, that is between 116 and 118 days late.[12]Mr Kothari’s final written submissions appeared to raise the possibility that he, or others on his behalf, had sought to enter into a time to pay agreement with HMRC. However, when he was asked about this matter during the hearing he acknowledged that no agreement was put in place, which accorded with HMRC’s position. Furthermore, documents in the supplementary bundle showed that insofar as there was contact between HMRC and Mr Kothari or his agent, it all occurred after 15 April 2024 i.e. after the Penalty had been charged.[13]On the basis of these undisputed facts, and as there had been no agreement to defer payment of the tax in accordance with paragraph 10 of Sch. 56, we find that the Penalty has been correctly charged.

Reasonable Excuse

[14]Having found that the Penalty has been correctly charged we must consider whether Mr Kothari has a reasonable excuse for the late payment of the CGT.[15]Paragraph 16 of Sch. 56 states:
“Reasonable excuse 16 (1) Liability to a penalty under any paragraph of this Schedule does not arise in relation to a failure to make a payment if P satisfies HMRC or (on appeal) the First-tier Tribunal or Upper Tribunal that there is a reasonable excuse for the failure. (2) For the purposes of sub-paragraph (1)— (a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside P’s control, (b) where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the failure, and (c) where P had a reasonable excuse for the failure but the excuse has ceased, P is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.” (2) For the purposes of sub-paragraph (1)— (a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside P’s control, (b) where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the failure, and (c) where P had a reasonable excuse for the failure but the excuse has ceased, P is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.”
[16]In Perrin v HMRC [2018] UKUT 0156 (TCC) the Upper Tribunal provided guidance, which we must follow, on how to approach the question of whether a reasonable excuse exists in these terms:
“81. When considering a “reasonable excuse” defence, therefore, in our view the FTT can usefully approach matters in the following way: (1) First, establish what facts the taxpayer asserts give rise to a reasonable excuse (this may include the belief, acts or omissions of the taxpayer or any other person, the taxpayer’s own experience or relevant attributes, the situation of the taxpayer at any relevant time and any other relevant external facts). (2) Second, decide which of those facts are proven. (3) Third, decide whether, viewed objectively, those proven facts do indeed amount to an objectively reasonable excuse for the default and the time when that objectively reasonable excuse ceased. In doing so, it should take into account the experience and other relevant attributes of the taxpayer and the situation in which the taxpayer found himself at the relevant time or times. It might assist the FTT, in this context, to ask itself the question “was what the taxpayer did (or omitted to do or believed) objectively reasonable for this taxpayer in those circumstances? (4) Fourth, having decided when any reasonable excuse ceased, decide whether the taxpayer remedied the failure without unreasonable delay after that time (unless, exceptionally, the failure was remedied before the reasonable excuse ceased). In doing so, the FTT should again decide the matter objectively, but taking into account the experience and other relevant attributes of the taxpayer and the situation in which the taxpayer found himself at the relevant time or times.” (1) First, establish what facts the taxpayer asserts give rise to a reasonable excuse (this may include the belief, acts or omissions of the taxpayer or any other person, the taxpayer’s own experience or relevant attributes, the situation of the taxpayer at any relevant time and any other relevant external facts). (2) Second, decide which of those facts are proven. (3) Third, decide whether, viewed objectively, those proven facts do indeed amount to an objectively reasonable excuse for the default and the time when that objectively reasonable excuse ceased. In doing so, it should take into account the experience and other relevant attributes of the taxpayer and the situation in which the taxpayer found himself at the relevant time or times. It might assist the FTT, in this context, to ask itself the question “was what the taxpayer did (or omitted to do or believed) objectively reasonable for this taxpayer in those circumstances? (4) Fourth, having decided when any reasonable excuse ceased, decide whether the taxpayer remedied the failure without unreasonable delay after that time (unless, exceptionally, the failure was remedied before the reasonable excuse ceased). In doing so, the FTT should again decide the matter objectively, but taking into account the experience and other relevant attributes of the taxpayer and the situation in which the taxpayer found himself at the relevant time or times.”

Stage 1: Establishwhat facts the taxpayer asserts give rise to a reasonable excuse

[17]Mr Kothari says he has a reasonable excuse for the late payment of the CGT because he was unable to pay it any earlier than he did as a result of events outside his control. In his final written submissions he set out five grounds as the basis for his reasonable excuse. We shall adopt that structure, though we have taken account of his other written and oral representations.[18]The first ground is that CGT liability arose because Mr Kothari received a distribution in specie of real properties (the “Properties”) from Pharmchem International Limited (“Pharmchem”). Crucially, though the Properties were worth approximately £1.7M, he received the properties themselves and not liquid funds and that made immediate payment of the CGT impossible.[19]The second ground is that Mr Kothari made a mistake in that he had thought he did not need to declare the CGT liability arising from his receipt of the distribution in specie in his return for 21/22 as he did not receive legal title to the Properties until the 22/23 tax year. His intention had been to declare the receipt in his 22/23 return, but following HMRC’s enquiry into his 21/22 return and the Closure Notice, he accepts it should have been declared in his 21/22 return. Mr Kothari told us he had been a director and shareholder of Pharmchem. Pharmchem when into members’ voluntary liquidation on 06 April 2021. There were long delays with the complex members’ voluntary liquidation, which Mr Kothari said were in some part the fault of HMRC which was very slow to deal with the matters it needed to tackle before the member’s voluntary liquidation could conclude. As a result, the legal title to the Properties did not pass to Mr Kothari until 11 January 2023.[20]The third ground and fourth grounds, which are appropriate to consider together are that Mr Kothari “…took every reasonable and proactive step to raise funds as soon as the potential [CGT] liability became apparent, including instructing mortgage brokers in June 2023 and solicitors in August 2023.”. Mr Kothari explained how he needed to raise the funds by borrowing against the Properties, however first it was necessary to restructure the ownership of the Properties. Prior to the distribution in specie Pharmchem had leased the Properties to Mr Kothari and his wife who then sublet them to others. When the freehold to the Properties transferred to Mr Kothari and his wife he set about trying to borrow funds by approaching mortgage brokers. He discovered that he was unable to borrow against them as he was both the freeholder and leaseholder of the Properties. Eventually a mortgage broker was found who could help. A plan was then devised to restructure the ownership of the Properties which involved the freehold being transferred to Mr Kothari’s son. Lawyers were instructed on or about 02 August 2023 and the restructuring implemented, but this took until around 05 June 2024 to complete. In the meantime, Mr Kothari had made a one-off payment of £5,000 to HMRC on 29 May 2024. Once the restructuring was complete the borrowing could be obtained and the CGT was then paid without further delay between 10 and 12 July 2024.[21]The fifth ground is that HMRC's claim that an officer visited Mr Kothari’s property on 26 April and 9 May 2024 is untrue.

Stage 2: Decide which of those facts are proven

[22]The hearing bundle contains a copy of Mr Kothari’s claim for business asset disposal relief in respect of his share of the distribution in specie of the Properties made on 06 April 2021. The associated calculation shows the Properties were valued at £1,727,293 of which £1,727,120 was distributed to Mr Kothari, giving rise to CGT of £240,964.20 for Mr Kothari pay. Mr Kothari’s account of these events was not challenged by HMRC. Accordingly, we find that Mr Kothari received real property to the value of £1,727,120 by way of a distribution in specie made by Pharmchem on 06 April 2021.[23]We were not shown any documentary evidence of the transfer of the legal title of the Properties to Mr Kothari, however we were shown a letter from the liquidator of Pharmchem dated 11 January 2023 indicating that the winding up of Pharmchem concluded around that time. We also heard how slow responses from HMRC had prolonged the members’ voluntary liquidation process. HMRC did not contest Mr Kothari’s account and that this was when legal title to the Properties passed to him. Accordingly, we find that the legal title to the properties passed to Mr Kothari on or about 11 January 2023.[24]We accept Mr Kothari’s testimony that he made a mistake in that he thought that, as he did not receive legal title to the Properties until around 11 January 2023, he did not need to declare the gain in his self-assessment return for 21/22, but should declare it in his return for 22/23.[25]Mr Kothari asserted that as soon as the CGT liability became apparent, he took every reasonable and proactive step to raise funds so he could pay the CGT. There are a number of elements to this which we need to consider.[26]Mr Kothari asserted in his written and oral submissions and evidence that he needed to borrow the funds to pay the CGT using the Properties as security in the manner that he eventually managed to do. If we were satisfied that the Properties were his only assets, we would have likely accepted that was the case. However, we were shown no evidence that Mr Kothari did not already have funds available to pay the CGT or other, quicker, means to raise the required funds. When Mr Kothari was asked about whether he could have raised the required funds more quickly by, for example, borrowing using his home as security, he said he had not considered that course of action. Accordingly, we find that Mr Kothari has not proven that he needed to borrow the required funds using the Properties as security in order to pay the CGT. We do though find that is the course of action he pursued to raise the funds to pay the CGT.[27]The first documentary evidence Mr Kothari produced to show the steps he took to pursue that course of action was an email dated 26 June 2023 from one of his associates, Sunil Jain, to Sachin Phul, the Relationship Director of Mantra Commercial. Mr Kothari told us this was the start of the formal instructions to the mortgage broker who advised on the restructuring and arranged the loan which was used to pay the CGT. That email was sent roughly 5½ months after legal title to the properties had passed to Mr Kothari. When asked about what had happened in those 5½ months Mr Kothari explained that during that period efforts were being made to find a mortgage broker who was able to able to deal with the complex situation and, once this borker had been found, there had been detailed phone calls with them before the email of 26 June 2023 was sent.[28]We have some difficulty with that account of events. The only documentary evidence relating to what happened in the period up to 26 June 2023 is the email that was produced which says:
“Hi Sachin, We have 2 flats (Flat 5 & 6 , The Vine, Stanmore HA7 3DA) owned by Mr. Pankaj Kothari on which we are planning to take BTL mortgage. Please not [sic] that currently both the flats are held under the freehold title but would be okay to make leases if required. Can you please call me on 07506736075 to discuss our options. Regards, Sunil”
Sunil”[29]That reads rather more like first contact with Sachin Phul about this matter rather than formal instructions which followed lengthy previous discussions about the matter.[30]We were not shown documentary evidence of emails to other mortgage brokers or any other documentary evidence to show what steps had been taken towards raising the funds during the roughly 5½ months between 13 January 2023 and 26 June 2023.[31]In terms of the restructuring of the ownership of the Properties, we were shown an email dated 02 August 2023 from Sunil Jain sent on behalf of Trout Rise Developments Limited to Milli Jones of Harold Benjamin solicitors. The next email is dated 05 June 2024, roughly 10 months later, stating “I am pleased to confirm registration of the transfer and the two leases have now completed and I attach the registers and the title plans for each.”. Mr Kothari told us that these two emails represented the start and finish of the restructuring process. In his final written submissions Mr Kothari said “It is submitted that the duration of this process, approximately 10 months for a structurally complex commercial conveyancing exercise, was reasonable and not the result of any want of diligence on the Appellant's part.”. However, we were shown no further exchanges with the lawyers, no contracts or deeds relating to the transfer of titles to the Properties and no Land Registry documentation or anything else which might have helped us to see what went on in that 10 month period, and that it could not have been done materially quicker.[32]Furthermore, though Mr Kothari described the restructuring as a structurally complex conveyancing exercise, he also described it as being the transfer of the freehold titles from Mr Kothari and his wife to their son. Absent any evidence to show that the transfer of the freehold to his son required what could be described as structurally complex conveyancing, he has not proven that was the case.[33]Mr Kothari also produced very little evidence of the borrowing arrangements that were put in place. We were shown a chain of emails dated 10 July 2024. The first was sent to Mr Kothari by “enact Conveyancing” indicating there had been some unspecified development regarding an unspecified “mortgage transaction”. The email chain ends with an email from Sunil Jain to Mr Kothari and two others saying “Sir, Jamie (Broker) called just now to update that he got an email stating that BM had requested the funds for completion today.”. Mr Kothari told us, and we accept, that these emails show when the funds borrowed against the Properties became available to him. That same day Mr Kothari made the first two of the five instalment payments made between 10 and 12 July 2024 to pay the outstanding balance of the CGT.[34]Whilst we find that Mr Kothari quickly paid the balance of CGT due to HMRC once the funds raised through the borrowing against the Properties became available to him, he has not proven that process could not have been completed more quickly so that the CGT could have been paid by its due date, or even within 30 days of that to avoid the Penalty being charged. The scant documents Mr Kothari produced relating to the restructuring and borrowing arrangements and his otherwise unsupported assertions of what occurred in the period of 1½ years between 11 January 2023 and when the payments were made in May and July 2024 to settle the CGT fall far short of satisfying us that the process could not have been completed in time to pay the CGT and avoid the Penalty being charged.[35]In his final written submissions Mr Kothari asserted that:
“HMRC offers no evidence that this restructuring could or should have been completed more quickly. The Respondents have not put before the Tribunal any expert evidence on conveyancing timescales, nor have they identified any specific step the Appellant could and should have taken to accelerate the process.”
That is to approach the matter in the wrong way. Mr Kothari first has produce at least enough evidence to satisfy us, on the balance probabilities, that the restructuring could not have been completed in time to pay the CGT and avoid the Penalty being charged, and he has not done that.[36]During the hearing on 30 June 2024 there were occasions when Mr Kothari indicated that he had more documents he could produce to support his case. Whilst we do not know whether they would have supported or undermined his case, plainly many more documents do exist as the distribution in specie and subsequent restructuring and borrowing arrangements would have left a significant trail of documents. Mr Kothari did not ask for an adjournment to allow him to produce further documentary evidence, but had he done so we would have refused. The original hearing of this appeal on 21 November 2025 was adjourned specifically to give Mr Kothari the opportunity to provide a written explanation of why he was unable to pay the CGT until July 2024 and to provide any documents upon which he wished to rely when the hearing of the appeal resumed. Written directions to that effect were released on 24 November 2025, leaving no room for doubt about what Mr Kothari needed to do. Mr Kothari clearly understood his grounds of appeal and it was his decision to limit the documents he relied upon to those which he provided.[37]Regarding Mr Kothari’s assertion that HMRC's claim that an Officer visited Mr Kothari’s property on 26 April and 9 May 2024 is untrue, there were discrepancies between the Officer’s account of the visit and Mr Kothari’s explanation of his home which cast serious doubt on where the Officer had visited, however it is not necessary for us to make findings about what happened. Mr Kothari seemed to misunderstand that somehow the visits played a part in the Penalty being charged. As we explained during the hearing, that is not the case, the Penalty was charged by the operation of Sch. 56 when the CGT had not been paid by 15 April 2024. Whether or not an HMRC Officer did visit his property on 26 April or 09 May 2024 is of no relevance to any of the issues we have to determine, including whether Mr Kothari had a reasonable excuse for the late payment of the CGT.[38]The foundation of Mr Kothari’s reasonable excuse is that he needed to raise the funds to be able to pay the CGT by borrowing them using the Properties as security in the manner that he eventually managed to do.[39]Whilst we have found that Mr Kothari did raise the funds to pay the CGT by borrowing using the Properties as security, he has not proven that he needed to raise them in that manner to be able to pay the CGT. He has not shown that he did not already have the required funds or that he could not have raised them by other means to pay the CGT by its due date. Accordingly, the foundation for Mr Kothari’s reasonable excuse is missing and so we find he does not have a reasonable excuse for the late payment of the CGT.[40]If we had been satisfied that Mr Kothari did need to raise the funds to be able to pay the CGT in the manner that he did, we would have still concluded that he did not have a reasonable excuse for the late payment of the CGT. Paragraph 16(2)(a) of Sch.56 stipulates that an insufficiency of funds is not a reasonable excuse unless attributable to events outside the taxpayer's control and Mr Kothari has not proven that to be the case. Ultimately Mr Kothari’s case was that after he received legal title to the Properties on 11 January 2023 he began try to raise the funds which he needed to pay the CGT by borrowing them using the Properties as security, but as a result of events outside his control it took until 10 July 2014 to raise the funds. As we have found above, Mr Kothari’s scant evidence of what happened in that period of 1½ years falls far short of persuading us that the process could not have been completed more quickly so that the CGT could have been paid by 15 April 2024, avoiding the Penalty.[41]Further, the CGT liability did not arise unexpectedly on 11 January 2023, the distribution in specie of the Properties was made on 06 April 2021 and Mr Kothari’s claim for business asset disposal relief shows he was well aware long before 11 January 2023 of the CGT liability he would face. Plainly Mr Kothari had at least from 06 April 2021 to consider how he might meet the CGT liability. It may well be that he would have wanted to take the same course of action to raise the funds by borrowing using the Properties as security and could not have begun the restructuring until the legal title to the properties passed to him and his wife on 11 January 2023, but we see no reason why it would not have been possible to have arranged matters so that the restructuring process could have been started as soon as the legal title passed to Mr Kothari. Instead, it seems Mr Kothari only began to investigate what needed to be done after legal title to the Properties had passed to him which meant that the Mortgage brokers who had a hand in that restructuring where not instructed until around 5½ months later and the firm of lawyers which dealt with it were not instructed until around 7 months later.[42]Having found that Mr Kothari does not have a reasonable excuse for the late payment of the CGT there is no need for us to determine when the excuse ceased. Also, we need not consider Stage 4 of the Perrin Test i.e. whether the failure was remedied without unreasonable delay once the reasonable excuse had ceased.

Special Circumstances

[43]Para 9 of Sch.56 states:
“Special reduction 9 (1) If HMRC think it right because of special circumstances, they may reduce a penalty under any paragraph of this Schedule. (2) In sub-paragraph (1) “special circumstances” does not include— (a) ability to pay, or (b) the fact that a potential loss of revenue from one taxpayer is balanced by a potential over-payment by another. (3) In sub-paragraph (1) the reference to reducing a penalty includes a reference to— (a) staying a penalty, and (b) agreeing a compromise in relation to proceedings for a penalty.” (2) In sub-paragraph (1) “special circumstances” does not include— (a) ability to pay, or (b) the fact that a potential loss of revenue from one taxpayer is balanced by a potential over-payment by another. (3) In sub-paragraph (1) the reference to reducing a penalty includes a reference to— (a) staying a penalty, and (b) agreeing a compromise in relation to proceedings for a penalty.”
[44]In this case HMRC decided that there were no such special circumstances and so no reduction was made.[45]Under paragraph 15(3) of Sch. 56 we have the power to reduce a penalty to a different extent, but only if we think that HMRC’s decision that there were not special circumstances was “flawed”. In David Collis v HMRC [2011] UKFTT 588 (TC)) that was explained in these terms:
“In the context of a decision of HMRC as to whether a reduction in a penalty should be made on account of special circumstances, the general test will be whether the decision is so demonstrably unreasonable as to be irrational or perverse, such that no reasonable authority could ever have come to it.”
[46]In Barry Edwards v HMRC [2019] UKUT 137 (TCC), when considering what is meant by “special circumstances” in relation to an identically worded legislative provision in Sch. 55 of the same Act the Upper Tribunal endorsed this passage from Advanced Scaffolding (Bristol) Limited v HMRC [2018] UKFTT 0744 (TC):
“101. I appreciate that care must be taken in deriving principles based on cases dealing with different legislation. However, I can see nothing in schedule 55 which evidences any intention that the phrase “special circumstances” should be given a narrow meaning. 102. It is clear that, in enacting paragraph 16 of schedule 55, Parliament intended to give HMRC and, if HMRC’s decision is flawed, the Tribunal a wide discretion to reduce a penalty where there are circumstances which, in their view, make it right to do so. The only restriction is that the circumstances must be “special”
. Whether this is interpreted as being out of the ordinary, uncommon, exceptional, abnormal, unusual, peculiar or distinctive does not really take the debate any further. What matters is whether HMRC (or, where appropriate, the Tribunal) consider that the circumstances are sufficiently special that it is right to reduce the amount of the penalty.”[47]Mr Kothari’s representations about special circumstances were largely that the facts and matters he asserted gave rise to a reasonable excuse also amounted to special circumstances.[48]Additionally, Mr Kothari asserted that he had irrationally and/or perversely and/or disproportionately been penalised twice for the problems he encountered with the CGT in relation to his self-assessment return for 21/22. There is nothing in such arguments. A penalty had been charged to Mr Kothari under Schedule 24 to the Finance Act 2007 for the separate matter of the careless inaccuracy of failing to declare the gain in his 21/22 self-assessment return. The Penalty under appeal has been correctly charged for the entirely separate failure to pay the CGT within 30 days of the due date for payment.[49]In light of the findings of fact set out above, taking into account what we heard from the parties during the hearing and the documents we were shown, we find that HMRC’s decision not to make a special reduction of the Penalty was not flawed.

Conclusion

[50]For all the reasons given above this appeal is dismissed.

Right to apply for permission to appeal

[51]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 09 July 2026