Kingsley v Billingham
| Jurisdiction | England & Wales |
| Judgment Date | 06 February 1992 |
| Date | 06 February 1992 |
| Court | Chancery Division |
Chancery Division.
Knox J.
The taxpayer appeared in person.
Timothy Brennan (instructed by the Solicitor of Inland Revenue) for the Crown.
Capital gains tax - Application to remit case to special commissioner - Taxpayer wished to adduce additional evidence - Whether case should be remitted - Taxes Management Act 1970 section 8 subsec-or-para (1) section 8 subsec-or-para (2) section 56 subsec-or-para (6) section 56 subsec-or-para (7)Taxes Management Act 1970, sec. 8(1), (2), 56(6), (7).
This was an application by the taxpayer, as administrator of the estate of his uncle, in an appeal by way of case stated against a determination of a special commissioner to remit the case to the special commissioner, under the Taxes Management Act 1970 section 56 subsec-or-para (6)Taxes Management Act 1970, sec. 56(6) or Taxes Management Act 1970 section 56 subsec-or-para (7)(7).
The special commissioner had found the taxpayer guilty of neglect and liable for default interest under the Taxes Management Act 1970 section 88Taxes Management Act 1970, sec. 88 in respect of assessments to capital gains tax for the years 1977-78 to 1984-85 in that he had failed to make returns of capital gains arising in those years in accordance with the Taxes Management Act 1970 section 8 subsec-or-para (1) section 8 subsec-or-para (2)Taxes Management Act 1970, sec. 8(1) and (2) (applied to capital gains tax byTaxes Management Act 1970 section 12 subsec-or-para (1)sec. 12(1)).
He contended that, if he had asked for an adjournment and it had been granted, he could have produced evidence to the commissioner showing that accounts had been delivered to the inspector in good time giving the inspector sufficient information to raise assessments. However, as he appeared in person without professional assistance, he had not been aware that such evidence might be required. The taxpayer claimed that in those circumstances, added to the fact that he had been ill shortly before the hearing before the commissioner, he had a reasonable excuse within the Taxes Management Act 1970 section 118 subsec-or-para (2)Taxes Management Act 1970, sec. 118(2) for failing to submit returns.
Held, refusing to remit the case to the special commissioner and dismissing the taxpayer's appeal:
1. It was for the taxpayer, even if unrepresented, to make his case before the commissioners. If the court were to order further information to be laid before the special commissioner it had to be satisfied that the material sought to be added was something which had come into existence or had been discovered subsequent to the hearing.
2. The commissioner's finding of neglect was not unreasonable. The term "neglect" was apt to embrace a failure to submit returns required by Taxes Management Act 1970 section 8sec. 8 of the 1970 Act. Even if the inspector had the information which the taxpayer claimed he had, it would not have been a proper substitute for the returns which would have included a statutory declaration underTaxes Management Act 1970 section 8 subsec-or-para (2)sec. 8(2) as to their accuracy and completeness.
1. On 6 March 1990 I [Mr Brian O'Brien], one of the special commissioners, heard the appeal of Michael Glen Kingsley ("the taxpayer") as administrator of the estate of Marques Kingsley deceased against a determination made by HM Inspector of Taxes under the provisions of the Finance Act 1989 section 160Finance Act 1989, sec. 160: that is to say a determination that the following amounts of tax charged by assessments to capital gains tax for the eight fiscal years 1977-78 to 1984-85 inclusive carried interest under theTaxes Management Act 1970 section 88Taxes Management Act 1970, sec. 88:
£ |
£ |
||
1977-78 |
4674.00 |
1978-79 |
3789.60 |
1979-80 |
10,608.20 |
1980-81 |
12,008.40 |
1981-82 |
22,302.60 |
1982-83 |
30,426.30 |
1983-84 |
16,227.90 |
1984-85 |
11,176.50 |
2. Mr Kingsley did not dispute any of those figures, or the dates (also appearing in the determination) when, for the purposes of the saidTaxes Management Act 1970 section 88sec. 88, the tax ought in each case to have been paid. The issues for my decision, shortly stated were:
(i)(a) whether, in so far as the amendment of Taxes Management Act 1970 section 88sec. 88 effected by Finance Act 1989 section 160 subsec-or-para (1)sec. 160(1) of theFinance Act 1989 gave an inspector or the Board a new discretion in the matter, an exercise of such discretion against a taxpayer is reviewable by the general or special commissioners on appeal; and (b) if so, whether in the circumstances of the present case the inspector's exercise of discretion should be overturned in Mr Kingsley's favour;
(ii) whether, on the true construction of the Finance Act 1989 section 159Finance Act 1989, sec. 159, a determination may be made on the ground of "the fraud, wilful default, or neglect" of the taxpayer in respect of any default occurring before 27 July 1989 (when the Act was passed);
(iii) whether the taxpayer had been guilty of wilful default or neglect.
3. The taxpayer and the inspector presented their cases in person: their presentations being a mixture of argument and evidence. There were no other witnesses.
4. [Paragraph 4 listed the documents admitted before the commissioner.]
5. Upon the evidence before me I found the following facts:
(a) the taxpayer is the sole administrator of the estate of his late uncle, Mr Marques Kingsley, who died on 17 May 1974. His appointment as administrator followed litigation.
(b) The estate consisted in the main of small residential properties, and a farm. The administration is still incomplete.
(c) A tax return form for the year 1977-78 was issued to the taxpayer by the inspector on or immediately after 6 April 1978; and a return form for each succeeding year up to and including 1984-85 was similarly issued to him on or about the corresponding date in each year. None of the said returns was completed and returned to the inspector in due time. Completed returns for all eight years were delivered to the inspector in April 1986.
(d) The inspector did not until 1984 press for delivery of the returns because the firm of accountants then acting for the taxpayer generally delivered some form of accounts (which were not before me) which apparently satisfied the inspector for income tax purposes.
(e) In April or May 1984 the accountants disclosed to the inspector that many of the properties comprised in the estate had been sold since 1977; and it has since been established that there were chargeable disposals in that and each succeeding year up to 1984-85 (at least). The disclosure led to the inspector's insistence on delivery of the outstanding annual returns and his letters thereafter, both to the accountants and to the taxpayer himself, referred to the fact that interest was running. The correspondence also referred to the penalties which had been incurred for the failure to deliver the returns; and the returns were eventually delivered very shortly before the general commissioners were due to hear an information laid by the inspector for such penalties.
(f) On 4 December 1984 the inspector made estimated assessments to capital gains tax for the four years 1978-79 to 1981-82 inclusive. These were...
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