Drown & Anor (as Executors of Leadley Deceased) v Revenue & Customs [2014] UKFTT 892 (TC) – executors can claim CGT relief for pre-death losses

The First-tier Tribunal has held that the executors of a deceased individual who had incurred capital losses during his lifetime were able to claim relief for those losses against income and capital gains that had arisen before his death.

The full case report can be found here

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Managed office letting business is not a business – IHT business property relief

Trustees of David Zetland Settlement v HMRC [2013] UKFTT 284 (TC)

The First-tier Tax Tribunal has denied inheritance tax business property relief on a block of office lettings owned and managed by a trust.  The main reason given was that a commercial letting is mainly an investment rather than a business even though many of the services provided were over and above what would normally be expected under a tenancy. 

The decision shows how difficult it is to persuade a tribunal that let property is not mainly the holding of an investment.  

The report from the First-tier Tax Tribunal can be found here


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Furnished holiday lets and IHT business property relief

Pawson deceased v HMRC 2012 UKFTT 51 (TC)

The executors of the late Nicolette Pawson are launching a fighting fund to take their case to the England and Wales Court of Appeal, following their defeat by HMRC at the Upper tax Tribunal last month.

The case turns on whether furnished holiday lets are eligible for business property relief from inheritance tax.

“Mr Justice Henderson decided that the services provided ‘were all of a relatively standard nature [with] nothing to distinguish it from any other actively managed furnished letting business of a holiday property’.”

The Upper tax Tribunal decision can be found here, my earlier blog on this can be found here and an excellent piece from the STEP journal on this can be found here.


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Capital Gains Tax – main residence election

Estate of A R Ellis deceased v HMRC, [2013] UKFTT 775 TC02426

The First-tier tax tribunal has confirmed that a taxpayer’s election as to his main residence is conclusive as long that the property in question was in fact one of his residence.

The Tribunal decision can be found here.

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SDLT tax planning victory for HMRC

HMRC has won what might turn out to be a very significant victory in a case involving Stamp Duty Land Tax planning and in particular sub-sale relief. 

A report on this from STEP on-line Journal can be found here.

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Orsman v HMRC 2012 TC 01921 – Stamp Duty Land Tax

The “slab” basis of Stamp Duty Land Tax on occasion encourages purchasers to try and include part of the purchase price in the exempt “fixtures and fittings” category.  This was just such a case.  HMRC are of course well aware of this ploy

This case concerned whether £800 worth of fitted units in a garage were “land” and therefore subject to SDLT.   If included as land the SDLT bill increased from £2,500 to £7,524.

The Tribunal concluded “that both the worktop and the units were land.  The worktop was fixed to the house and made it possible to use that part of the garage as a working area.   The units had a small degree of affixation but were in place to make the garage a useful storage and work area — a facility which enhanced the house.”

The full report from the First-tier Tribunal can be found here

Hopefully this will be one of the issues dealt with by the introduction of a Scottish Land and Buildings Tax in 2015.   

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Two important tax decisions

Cameron & Ors v Revenue & Customs [2012] EWHC 1174 (Admin)

A taxpayer is entitled to rely upon a statement made in a formal HMRC publication unless and until the statement was revoked, withdrawn or altered with reasonable notice to all relevant taxpayers.  This applies even if a tax inspector had expressed a contrary view.  This matter concerned the application of concessionary treatment for seafarer’s earning deduction relief.

This decision appears to contradict the Supreme Court’s finding in the Gaines-Cooper residence case.   The full report from the England & Wales High Court administrative division  can be found here.

Orsman v Revenue & Customs [2012] UKFTT 227 (TC)

HMRC cannot introduce an additional argument in its statement of case to a tribunal that it had not included in its closure notice.   A “closure notice” is usually a letter issued by HMRC to the customer that its enquiry has ended.  The purpose of the “statement of case” is also to tell the customer what HMRC’s case is and is submitted to the tax tribunal.  

This matter concerned a Stamp Duty Land Tax return. 

The full decision of the First-tier Tax Tribunal can be found here.

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T Healy v HMRC [2012] UKFTT 246 (TC) – an actor’s professional expenses

This case concerend an actor working away from home and whether his accommodation, subsistence and travel expenses were “wholly and exclusively” incurred for the purpose of his profession.

Healy who is based in Cheshire was contracted to appear in the West End of London in the musical, Billy Elliot.  Healy claimed tax relief on the costs of his accommodation, subsistence and travel to and from the theatre.

The First-tier Tribunal held that the cost of his accoomodation was allowable but that his subsistence expenses and taxi fares were not.  The accommodation was allowable primarily because the actor had not moved to London.  He was only there during the week for the purposes of performing on stage.   That therefore met the “wholly and exclusively” test.

Healy’s subsistence expenses and taxi fares were disallowed on the basis that there was insufficient evidence to show the nature of the expense.

The full decision of the Tribunal can be found here.




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HMRC powers

In the case HMRC v Parissis, the First-tier Tax Tribunal held that a tax inspector can require an individual to hand over a document that he does not possess. The taxpayer’s only defence is to prove that the third party who holds the document has refused a request to supply it.

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Upper Tax Tribunal strikes out HMRC penalties for mentally injured robbery victim

The Upper Tax Tribunal has struck out late filing penalties imposed by HMRC upon a woman who became mentally incapable and homeless after being seriously injured by armed robbers. Although the robbers used her bank cards to steal all her savings, leaving her penniless for two years, an earlier tribunal decision nevertheless ordered her to pay the penalties.

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