Patrick Kearney v The Commissioners for HMRC

Patrick Kearney v The Commissioners for HMRC

Mr Kearney did not substantially loosen his UK ties during the relevant period and remained UK resident under common law principles. Officer Shanks made a valid discovery assessment, meeting both subjective and objective tests. Mr Kearney was negligent/careless in submitting returns without updating PwC advice, causing tax loss. Penalties are justified but quantum reduced to reflect cooperation.

Parties
Appellant: Patrick Kearney; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
29 January 2026
Procedural Posture
Tax Appeal / Final Judgment
Outcome
Appeals against tax assessments dismissed; appeals against penalties allowed in part
Legal Topics
Capital Gains Tax, Tax Residence, Discovery Assessments, Penalties, Self Assessment Returns
Tax Law Capital Gains Tax Tax Residence Discovery Assessments Penalties Self Assessment Returns

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Parties

Patrick Kearney

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / Final Judgment

Legal Issues

  1. 1 Whether Mr Kearney was UK resident during the relevant period under common law principles
  2. 2 Whether HMRC made a valid discovery assessment under section 29(1) Taxes Management Act 1970
  3. 3 Whether Mr Kearney was negligent/careless in submitting self-assessment returns

Ratio Decidendi

Mr Kearney did not substantially loosen his UK ties during the relevant period and remained UK resident under common law principles. Officer Shanks made a valid discovery assessment, meeting both subjective and objective tests. Mr Kearney was negligent/careless in submitting returns without updating PwC advice, causing tax loss. Penalties are justified but quantum reduced to reflect cooperation.

Court Disposition

Appeals against tax assessments dismissed; appeals against penalties allowed in part

Orders

  • Tax assessments for 2004/05, 2005/06, 2006/07, and 2009/10 upheld
  • Penalties reduced to 15% of potential lost revenue for each year