Lim v Revenue & Customs (INCOME TAX/CORPORATION TAX : Assessment/self-assessment) [2019] UKFTT 434 (TC) (02 July 2019)

Lim v Revenue & Customs (INCOME TAX/CORPORATION TAX : Assessment/self-assessment) [2019] UKFTT 434 (TC) (02 July 2019)

The appellant failed to discharge the burden of proving he was the beneficial owner of the properties or that the losses were incurred wholly and exclusively for the purposes of his trade. There was no evidence of a bare trust or binding liability. The claimed expenses were not allowable, and the inaccuracy in the return was deliberate, justifying the penalty imposed.

Citation
[2019] UKFTT 434
Parties
Appellant: Gordon Lim; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
02 July 2019
Procedural Posture
Income Tax/corporation Tax Assessment and Penalty Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Self Assessment, Business Expenses, Trading Status, Penalties for Inaccurate Returns
Tax Law Income Tax Self Assessment Business Expenses Trading Status Penalties for Inaccurate Returns

Case Brief

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Parties

Gordon Lim

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax/corporation Tax Assessment and Penalty Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether the appellant was carrying on commercial property trading
  2. 2 Whether expenditure in respect of forfeited deposits for aborted property purchases was wholly and exclusively for the purposes of trade
  3. 3 Whether inaccuracies in the appellant’s tax return were deliberate or careless

Ratio Decidendi

The appellant failed to discharge the burden of proving he was the beneficial owner of the properties or that the losses were incurred wholly and exclusively for the purposes of his trade. There was no evidence of a bare trust or binding liability. The claimed expenses were not allowable, and the inaccuracy in the return was deliberate, justifying the penalty imposed.

Court Disposition

Appeal dismissed

Orders

  • Closure Notice and amendment for the year ended 5 April 2011 upheld; tax arising is £24,823.57.
  • Penalty of £14,770.02 confirmed.