Akhtar v Revenue and Customs [2025] UKFTT 395 (TC) (02 April 2025)

Parties

Procedural Posture

Tax Appeal / First Tier Tribunal (tax Chamber) Final Judgment

Legal Issues

1. 1 Whether the discovery assessments issued under section 29 TMA 1970 were valid and in time
2. 2 Whether the appellant provided satisfactory explanations for the source of funds for unexplained bank deposits
3. 3 Whether the source of funds for property purchases was untaxed withdrawals from the appellant's business or provided by friends and relatives

Ratio Decidendi

The Tribunal found that valid discoveries were made under section 29 TMA 1970 and that some unexplained bank deposits were untaxed withdrawals from the appellant's business, justifying assessments for those amounts. However, the Tribunal accepted that for certain property deposits, the appellant provided sufficient evidence that funds were provided by friends and relatives, and that in some cases properties were held on constructive trust for those third parties. The Tribunal also found that, for some properties, beneficial ownership was shared with the appellant's wife, affecting the allocation of capital gains and rental income. The assessments were upheld in part and reduced accordingly.

Court Disposition

Appeal allowed in part

Orders

• Assessments reduced to reflect only those unexplained deposits and property gains/rental income for which the appellant was found liable; HMRC to issue revised assessments accordingly.
• No order as to costs.