Gareth Clark v The Commissioners for HM Revenue and Customs

JurisdictionUK Non-devolved
JudgeMr Justice Arnold,Judge Herrington
Neutral Citation[2018] UKUT 0397 (TCC)
CourtUpper Tribunal (Tax and Chancery Chamber)
Subject MatterTax,26 November 2018
Date26 November 2018
Published date26 November 2018
[2018] UKUT 0397 (TCC)
Appeal number
UT/2017/0102
Income tax pension scheme unauthorised payments charge scheme to extract
funds from SIPP and to provide member with access to funds by loans and
investment management whether transfer to trust which was void for uncertainty
was an unauthorised member payment whether payment was within scope of
discovery assessment
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
GARETH CLARK
Appellant
- and
THE COMMISSIONERS FOR HER
MAJESTY’S REVENUE AND CUSTOMS
Respondents
Tribunal: The Hon Mr Justice Arnold and Judge Timothy Herrington
Sitting in public in London on 12 and 13 November 2018
Michael Jones, instructed by RPC, for the Appellant
Jonathan Davey QC and Sam Chandler, instructed by the General Counsel and Solicitor
to HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2018
2
DECISION
Introduction
1. This is an appeal by Gareth Clark from two decisions of the First-Tier Tribunal
(Tax) (Judge Roger Berner and Ms Gill Hunter) dated 12 September 2016
([2016] UKFTT 0630 (TC), “the First Decision”) and 12 May 2017 ([2017]
UKFTT 0392 (TC), “the Second Decision”) dismissing an appeal by Mr Clark
against a discovery assessment by the Commissioners of Her Majesty’s
Revenue and Customs (“HMRC”) dated 25 March 2014 which assessed income
tax charges for the 2009/10 tax year under sections 208 and 209 of the Finance
Act 2004 (“FA 2004”) in the sum of £1,163,277.32 plus interest.
Factual background
2. The facts are set out in detail by the FTT in the First Decision at [5] to [56] and
in the Second Decision at [6] to [9]. Counsel for Mr Clark provided a helpful
summary in his skeleton argument which, with a few small modifications, we
gratefully adopt as follows.
3. Mr Clark is a retired businessman, having retired from full-time work in 2000.
His pension was originally in a fund established by his employer Southnews
plc, of which he was chairman.
4. In 2000 the Southnews Group was acquired by Trinity Mirror Group plc, which
also took over the pension fund.
5. In 2004 or 2005 it appeared that Trinity Mirror was proposing to make changes
to the pension scheme which would eliminate the requirement for it to make
further contributions. Consequently, Mr Clark established two self-invested
pension schemes (“SIPPs”), one with Suffolk Life in the amount of £2,115,000
(the Suffolk Life SIPP”) and another, with Scottish Equitable, in the amount
of £600,000 (the Scottish Equitable SIPP”).
6. Mr Clark grew concerned at the lack of returns being produced by the SIPPs
and wished to become more involved in the management of the funds and also
to be able to borrow from the funds in order to invest in his own capacity (since
he had a £3m capital loss which he could use to offset against capital gains).
7. In 2007 Ross Wheldon, a financial adviser to and friend of Mr Clark, introduced
him to Aston Court Chambers International SA (“Aston Court”). Aston Court
prepared a report which set out a number of options for Mr Clark, which
included what was called the “Pension Transfer Plan”.
8. The report recommended that both the Suffolk Life SIPP and the Scottish
Equitable SIPP be the subject of the Pension Transfer Plan, but in the event Mr
Clark proceeded with the Suffolk Life SIPP only. Aston Court charged Mr Clark
a fee for this, part of which was calculated as 10% of the value of the funds
transferred.

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