Ives v Revenue And Customs (Closure notices referring to omitted "property developing income" - whether the "matter in question") [2023] UKFTT 968 (TC) (13 November 2023)

Ives v Revenue And Customs (Closure notices referring to omitted "property developing income" - whether the "matter in question") [2023] UKFTT 968 (TC) (13 November 2023)

The closure notices, when read in context with HMRC's correspondence, permit consideration of alternative CGT liability as part of the 'matter in question'. Profits from the three property transactions do not constitute trading profits and are not subject to income tax as trading income. The profits are exempt from...

Source-derived case information.

Citation
[2023] UKFTT 968 (TC)
Parties
Appellant: Gary Ives; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
13 November 2023
Procedural Posture
Tax Appeal / Final Judgment
Outcome
Appeal allowed in principle; profits not subject to income tax as trading income and exempt from CGT under PPR relief.
Legal Topics
Closure Notices, Trading Profits, Capital Gains Tax, Principal Private Residence Relief, Discovery Assessments, Penalty Determinations
Tax Law Closure Notices Trading Profits Capital Gains Tax Principal Private Residence Relief Discovery Assessments Penalty Determinations

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Parties

Gary Ives

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / Final Judgment

Legal Issues

  1. 1 Whether closure notices referring to omitted 'property developing income' include alternative CGT liability as 'matter in question'
  2. 2 Whether profits from purchase, redevelopment, and sale of three properties constitute trading profits
  3. 3 Whether profits are exempt from CGT as gains arising on disposals of individual's sole or main residence

Ratio Decidendi

The closure notices, when read in context with HMRC's correspondence, permit consideration of alternative CGT liability as part of the 'matter in question'. Profits from the three property transactions do not constitute trading profits and are not subject to income tax as trading income. The profits are exempt from CGT as gains arising on disposals of Mr Ives' sole or main residence, qualifying for principal private residence relief under section 222 TCGA 1992.

Court Disposition

Appeal allowed in principle; profits not subject to income tax as trading income and exempt from CGT under PPR relief.

Orders

  • HMRC assessments and penalty determinations relating to trading profits set aside.
  • Profits from property transactions exempt from CGT under principal private residence relief.