John Beesley & Anor v The Commissioners for HMRC
Decision date: 25 July 2023
Neutral citation: [2023] UKFTT 650 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
HMRC issued discovery assessments for the appellants' 2015/16 tax year and imposed penalties; the appellants (via an agent) sought large CGT deductions for mortgage redemption and a personal guarantee payment which HMRC rejected. The First-tier Tribunal held the discovery assessments were valid and timely, disallowed the claimed deductions (mortgage redemption not allowable under s38 TCGA; guarantee payment did not give rise to an allowable loss in 2015/16 and could not be carried back), and upheld penalties for careless behaviour (reduced on review). The appeal was dismissed.
Ratio decidendi
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AI confidence in this ratio decidendi summary: high
Allowable deductions on a disposal for CGT are limited to those specified in s38 TCGA (purchase price, incidental acquisition/disposal costs and qualifying enhancement expenditure); payments under personal guarantees give rise to relief under s253 TCGA only where there is a qualifying loan and the payment is made, the loss arising in the year of payment and cannot be carried back; discovery assessments within the statutory time limits are competent even where taxpayers or their agents have not provided full returns.
Obiter dicta
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AI confidence in this obiter dicta summary: medium
The Tribunal noted that reliance on an agent's incorrect understanding of CGT does not constitute a reasonable excuse and adviser incompetence will not generally excuse taxpayers from tax consequences; late professional advice post-dating the tax year is irrelevant to the year in which relief is claimed.