HUGH McMAHON AGAINST GRANT THORNTON UK LLP [2020] ScotCS CSOH_50 (26 May 2020)

HUGH McMAHON AGAINST GRANT THORNTON UK LLP [2020] ScotCS CSOH_50 (26 May 2020)

The defender’s duty was limited by the terms of the retainer to personal tax compliance services, not proactive tax planning. While the defender provided information about entrepreneurs’ relief and the possibility of utilising a spouse’s allowance, it was not contractually or delictually obliged to provide unsolicited tax planning advice or to recommend postponement of the sale to enable the pursuer’s wife to qualify for entrepreneurs’ relief. The pursuer was made aware of the relevant issues at the appropriate time, and the defender did not breach its duty.

Citation
[2020] ScotCS CSOH_50
Parties
Pursuer: Hugh McMahon; Defender: Grant Thornton UK LLP
Jurisdiction
Scotland
Judgment Date
26 May 2020
Procedural Posture
Commercial Action (damages for Professional Negligence And/or Breach of Contract) / Proof Before Answer (trial on Evidence, Not Final Judgment on All Issues)
Outcome
Action dismissed
Legal Topics
Scope of Professional Retainer, Duty to Advise on Tax Mitigation, Entrepreneurs’ Relief, Capital Gains Tax Liability, Concurrent Contractual and Delictual Duties
Professional Negligence Contract Law Tax Law Scope of Professional Retainer Duty to Advise on Tax Mitigation Entrepreneurs’ Relief Capital Gains Tax Liability Concurrent Contractual and Delictual Duties

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Parties

Hugh McMahon

Pursuer

Grant Thornton UK LLP

Defender

Procedural Posture

Commercial Action (damages for Professional Negligence And/or Breach of Contract) / Proof Before Answer (trial on Evidence, Not Final Judgment on All Issues)

Legal Issues

  1. 1 Whether the defender (accountant) owed a contractual and/or delictual duty to advise the pursuer about the possibility of mitigating CGT liability by transferring shares to his wife to utilise her entrepreneurs’ relief.
  2. 2 Whether the defender breached that duty by failing to provide such advice.
  3. 3 Whether the pursuer suffered loss as a result.

Ratio Decidendi

The defender’s duty was limited by the terms of the retainer to personal tax compliance services, not proactive tax planning. While the defender provided information about entrepreneurs’ relief and the possibility of utilising a spouse’s allowance, it was not contractually or delictually obliged to provide unsolicited tax planning advice or to recommend postponement of the sale to enable the pursuer’s wife to qualify for entrepreneurs’ relief. The pursuer was made aware of the relevant issues at the appropriate time, and the defender did not breach its duty.

Court Disposition

Action dismissed

Orders

  • No damages awarded to the pursuer
  • No finding of breach of contract or negligence against the defender