Freeman v Revenue & Customs [2013] UKFTT 496 (TC) (19 September 2013)

Freeman v Revenue & Customs [2013] UKFTT 496 (TC) (19 September 2013)

The Tribunal held that the information provided in the 2002/03 tax return did not clearly alert a hypothetical officer to the insufficiency of tax, as required by s.29(5) TMA 1970. However, the prior supply of the Loan Note instrument in 2000, together with the written notification of its relevance, satisfied the requirements of s.29(6)(d)(ii) TMA 1970 for the 2002/03 year. Therefore, HMRC was precluded from raising a discovery assessment for that year.

Citation
[2013] UKFTT 496
Parties
Appellant: Michael Freeman; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
19 September 2013
Procedural Posture
Income Tax/corporation Tax Appeal / First Tier Tribunal (tax) Final Decision
Outcome
Appeal allowed
Legal Topics
Discovery Assessment, Self Assessment, Capital Gains Tax, Taper Relief, Qualifying Corporate Bonds, Section 29 TMA 1970
Tax Law Discovery Assessment Self Assessment Capital Gains Tax Taper Relief Qualifying Corporate Bonds Section 29 TMA 1970

Case Brief

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Parties

Michael Freeman

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax/corporation Tax Appeal / First Tier Tribunal (tax) Final Decision

Legal Issues

  1. 1 Whether HMRC was entitled to raise a discovery assessment for the 2002/03 tax year under s.29 TMA 1970
  2. 2 Whether sufficient information was provided to HMRC to preclude a discovery assessment under s.29(5) TMA 1970
  3. 3 Whether the supply of the Loan Note instrument in 2000 satisfied the requirements of s.29(6)(d)(ii) TMA 1970 for the 2002/03 tax year

Ratio Decidendi

The Tribunal held that the information provided in the 2002/03 tax return did not clearly alert a hypothetical officer to the insufficiency of tax, as required by s.29(5) TMA 1970. However, the prior supply of the Loan Note instrument in 2000, together with the written notification of its relevance, satisfied the requirements of s.29(6)(d)(ii) TMA 1970 for the 2002/03 year. Therefore, HMRC was precluded from raising a discovery assessment for that year.

Court Disposition

Appeal allowed

Orders

  • The discovery assessment issued by HMRC for the 2002/03 tax year is set aside.