Bingham v Revenue & Customs [2013] UKFTT 110 (TC) (11 February 2013)

Bingham v Revenue & Customs [2013] UKFTT 110 (TC) (11 February 2013)

The Tribunal held that as Mr Bingham was the sole provider of funds and retained control as a signatory, he remained the beneficial owner for tax purposes. The arrangements constituted a family settlement, and under the settlements legislation, Mr Bingham was liable for all interest income. The Tribunal found no effective transfer of beneficial interest to other family members. However, the Tribunal found that the out of time assessments under s.29 TMA 1970 could not be sustained as there was no negligence by Mr Bingham; he had acted on HMRC guidance and made full disclosure. Penalties were also found to be inappropriate.

Citation
[2013] UKFTT 110
Parties
Appellant: Andrew John Bingham; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
11 February 2013
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax) Substantive Decision
Outcome
Appeal allowed in part
Legal Topics
Income Tax, Assessment of Interest Income, Resulting Trusts, Settlements Legislation, Discovery Assessments, Negligence in Tax Returns
Tax Law Income Tax Assessment of Interest Income Resulting Trusts Settlements Legislation Discovery Assessments Negligence in Tax Returns

Case Brief

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Parties

Andrew John Bingham

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax) Substantive Decision

Legal Issues

  1. 1 Whether interest earned on joint bank accounts in the names of taxpayer and family members is assessable solely on the taxpayer as provider of funds
  2. 2 Whether out of time assessments under s.29 TMA 1970 are valid due to negligence
  3. 3 Whether penalties for negligence are appropriate

Ratio Decidendi

The Tribunal held that as Mr Bingham was the sole provider of funds and retained control as a signatory, he remained the beneficial owner for tax purposes. The arrangements constituted a family settlement, and under the settlements legislation, Mr Bingham was liable for all interest income. The Tribunal found no effective transfer of beneficial interest to other family members. However, the Tribunal found that the out of time assessments under s.29 TMA 1970 could not be sustained as there was no negligence by Mr Bingham; he had acted on HMRC guidance and made full disclosure. Penalties were also found to be inappropriate.

Court Disposition

Appeal allowed in part

Orders

  • Assessments for out of time years under s.29 TMA 1970 set aside
  • Penalties disallowed