TC03412: Mr Roderick Thomas & Mr Stuart Thomas
| Jurisdiction | UK Non-devolved |
| Judgment Date | 19 March 2014 |
| Neutral Citation | [2014] UKFTT 273 (TC) |
| Date | 19 March 2014 |
| Court | First Tier Tribunal (Tax Chamber) |
[2014] UKFTT 273 (TC)
Judge Peter Kempster
Mr Roderick Thomas for both Appellants
Mr Anthony Stewart (HMRC Special Investigations Unit) for the Respondents
Procedure - Tribunal Procedure Rule 8 - Application for barring of HMRC from proceedings on grounds of no reasonable prospect of success - Application refused.
[1]The Appellants (who are brothers) have a long-running dispute with the Respondents ("HMRC") concerning an offshore trust ("the Trust"), the relevant details of which dispute are set out below. In April 2013 HMRC issued assessments to both Appellants under section 29s 29 Taxes Management Act 1970 in respect of the tax year 2008-09 ("the Discovery Assessments"), assessing them on estimated gains of the Trust. The Appellants requested a formal internal review of the decision to issue the Discovery Assessments and in May 2013 that review upheld the original decision. In June 2013 the Appellants appealed to the Tribunal against the Discovery Assessments ("the Appeal Proceedings"). In August 2013 HMRC provided their statement of case in relation to the Appeal Proceedings.
[2]In September 2013 the Appellants made an application to the Tribunal for "directions under Rule 8". Tribunal Procedure Rule 8 provides, so far as relevant:
Striking out a party' case
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(3) The Tribunal may strike out the whole or a part of the proceedings if-
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(c) the Tribunal considers there is no reasonable prospect of the appellant's case, or part of it, succeeding.
(4) The Tribunal may not strike out the whole or a part of the proceedings under paragraphs (2) or (3)(b) or (c) without first giving the appellant an opportunity to make representations in relation to the proposed striking out.
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(7) This rule applies to a respondent as it applies to an appellant except that-
(a) a reference to the striking out of the proceedings must be read as a reference to the barring of the respondent from taking further part in the proceedings;
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(8) If a respondent has been barred from taking further part in proceedings under this rule and that bar has not been lifted, the Tribunal need not consider any response or other submissions made by that respondent, and may summarily determine any or all issues against that respondent.
[3]At the hearing the Appellants confirmed that the direction sought was a barring of HMRC from taking further part in the Appeal Proceedings, on the grounds that there was no reasonable prospect of HMRC's case succeeding.
[4]Mr Roderick Thomas for both Appellants submitted as follows.
[5]The dispute with HMRC has been running for fourteen years. In 1997 the Trust was settled by the Appellants' brother-in-law, who was domiciled and resident outside the UK. HMRC have maintained incorrectly that the Appellants are settlors of the Trust, and have been seeking to tax the Appellants on that basis on the income and gains of the Trust.
[6]Appeals against closure notices for 2002-03 had been the subject of hearings before Judge Berner in 2013, who required HMRC to state clearly their case. In December 2013 HMRC had conceded the dispute over those assessments. That was unreasonable conduct by HMRC, who had entailed the Appellants in a huge amount of work.
[7]Appeals against closure notices for 2004-05 had also been the subject of hearings before Judge Berner in 2013, who determined that there were no gains in respect of that tax year. The income for that tax year had been de minimis and so the Appellants had taken no further issue in relation to 2004-05.
[8]Appeals against assessments for 2005-06 had again been the subject of hearings before Judge Berner in 2013, who directed that the appeals should be stayed pending determination of the settlor issue in relation to...
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Spring Salmon & Seafood Ltd
...may nevertheless be an abuse of process (paragraphs 119, 124). [27]A further hearing is expected to take place later this year. Thomas [2014] TC 03412 [28]This appeal relates to discovery assessments issued in April 2013 in relation to the tax year 2008/09. The brothers applied to have HMRC......