Pflum v Revenue & Customs [2012] UKFTT 365 (TC) (01 June 2012)

Pflum v Revenue & Customs [2012] UKFTT 365 (TC) (01 June 2012)

Withdrawals and purchases in the UK made by Mrs Pflum from the joint Isle of Man account were not remittances by Mr Pflum for the purposes of Section 26 ITEPA 2003, as the funds withdrawn were at her disposal and beneficially owned by her. The joint account was operated at Mrs Pflum’s discretion, and any benefit to Mr Pflum was incidental. Therefore, the disputed sums should not be taxed as remittances by Mr Pflum.

Citation
[2012] UKFTT 365
Parties
Appellant: Klaus Otto Pflum; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
01 June 2012
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax Chamber) Substantive Decision
Outcome
Appeal allowed
Legal Topics
Income Tax, Remittance Basis, Employment Income, Joint Bank Accounts, Beneficial Ownership
Tax Law Income Tax Remittance Basis Employment Income Joint Bank Accounts Beneficial Ownership

Case Brief

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Parties

Klaus Otto Pflum

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

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

Legal Issues

  1. 1 Whether cash withdrawals and purchases in the UK by the other joint account holder (Mrs Pflum) from a joint offshore account constituted taxable remittances by Mr Pflum under Section 26 ITEPA 2003.

Ratio Decidendi

Withdrawals and purchases in the UK made by Mrs Pflum from the joint Isle of Man account were not remittances by Mr Pflum for the purposes of Section 26 ITEPA 2003, as the funds withdrawn were at her disposal and beneficially owned by her. The joint account was operated at Mrs Pflum’s discretion, and any benefit to Mr Pflum was incidental. Therefore, the disputed sums should not be taxed as remittances by Mr Pflum.

Court Disposition

Appeal allowed

Orders

  • Assessments for the years ended 5 April 2007 and 5 April 2008 to be reduced by excluding the disputed remittances.