Key Facts
- •Mrs. Harber failed to notify her liability to capital gains tax (CGT) after selling a property.
- •HMRC issued a "failure to notify" penalty of £3,265.11.
- •Mrs. Harber appealed, claiming a reasonable excuse due to mental health and/or ignorance of the law.
- •Mrs. Harber submitted nine fabricated FTT decisions generated by artificial intelligence (AI).
- •The Tribunal found the AI-generated cases to be not genuine.
- •The Tribunal applied the principles in *Christine Perrin v HMRC* [2018] UKUT 156 to determine reasonable excuse.
- •The Tribunal dismissed Mrs. Harber's appeal and upheld the penalty.
Legal Principles
Reasonable excuse for failure to notify CGT liability under FA 2008, Sch 41.
FA 2008, Sch 41, para 20; *Christine Perrin v HMRC* [2018] UKUT 156
Process for determining reasonable excuse: establish facts, decide which are proven, decide if proven facts constitute an objectively reasonable excuse, decide when the excuse ceased, and decide if the failure was remedied without unreasonable delay.
*Christine Perrin v HMRC* [2018] UKUT 156
Ignorance of the law is not automatically a reasonable excuse; it depends on the circumstances and whether it was objectively reasonable for the taxpayer to be ignorant.
*Christine Perrin v HMRC* [2018] UKUT 156
Outcomes
Appeal dismissed; penalty upheld.
The Tribunal found that Mrs. Harber did not have a reasonable excuse for her failure to notify her CGT liability, considering both her mental health and her claimed ignorance of the law. The reliance on fabricated AI-generated case law was not a factor in the decision.