In Pickles & another v HMRC [2020] UKFTT 195 (TC) (22 April), the FTT allowed the appeal in part, finding that crediting a directors’ loan account which was freely available for the directors/members to draw upon did not constitute a distribution for the purposes of CTA 2010 s 1020. This was because the transaction created a liability on the part of the company and so there was no transfer of assets. Alternatively, there was no benefit or value to any benefit accruing to the members from the transaction.
Discovery assessment and the concept of ‘staleness’
Marano v HMRC [2020] UKFTT 199 (TC) (23 April) concerns HMRC’s right to assess a large capital gain where the taxpayer had informed HMRC of the gain and paid the tax but had not included the gain on his return. Despite the tribunal’s criticism of the concept of a ‘stale’ discovery assessment (‘the case law on [TMA 1970] s 29 has taken a wrong turning, introducing a new restriction which is not present in the statute’), it accepted it was bound by precedent (Pattullo and Tooth). The decision also confirms that the regime for late return penalties is independent of when payments of tax were made: the fact that the taxpayer had made a payment on account of liability did not alter the calculation of the late filing penalty.
In Pickles & another v HMRC [2020] UKFTT 195 (TC) (22 April), the FTT allowed the appeal in part, finding that crediting a directors’ loan account which was freely available for the directors/members to draw upon did not constitute a distribution for the purposes of CTA 2010 s 1020. This was because the transaction created a liability on the part of the company and so there was no transfer of assets. Alternatively, there was no benefit or value to any benefit accruing to the members from the transaction.
Discovery assessment and the concept of ‘staleness’
Marano v HMRC [2020] UKFTT 199 (TC) (23 April) concerns HMRC’s right to assess a large capital gain where the taxpayer had informed HMRC of the gain and paid the tax but had not included the gain on his return. Despite the tribunal’s criticism of the concept of a ‘stale’ discovery assessment (‘the case law on [TMA 1970] s 29 has taken a wrong turning, introducing a new restriction which is not present in the statute’), it accepted it was bound by precedent (Pattullo and Tooth). The decision also confirms that the regime for late return penalties is independent of when payments of tax were made: the fact that the taxpayer had made a payment on account of liability did not alter the calculation of the late filing penalty.
