Roger William Morgan & Anor v The Commissioners for HMRC
Decision date: 24 June 2024
Neutral citation: [2024] UKFTT 565 (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
This appeal concerned whether a constructive trust over Plot 3 arose in 2015–16 when Mr and Mrs Morgan (as directors/shareholders) caused their company to develop the plot, and whether HMRC could reasonably have discovered any unassessed gain for 2015–16. The Tribunal held that the company acquired the whole beneficial interest on commencement of works in 2015–16 (express common intention constructive trust) but that HMRC could not reasonably have been expected to be aware the disposal occurred in 2015–16 for discovery‑assessment purposes. Appeals were allowed against 2016–17 closure notices and dismissed as regards the 2015–16 protective discovery assessments.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
An express common‑intention constructive trust can arise where directors/shareholders (acting in their corporate capacities) expressly agree that the company will have the beneficial interest and the company acts to its detriment (here, by commencing development), even if legal title is transferred later; and for s29(5) TMA a fact being ascertainable or prompting inquiry is insufficient—information available must be enough to justify raising an additional assessment or to enable a decision to do so, including awareness of the tax year in which the disposal occurred.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal observed (obiter) that in closely connected director/shareholder situations informality in documentation does not preclude finding an express common intention; and that expenditure paid into the company by directors via loan accounts treated as company expenditure is not expenditure "incurred by" the directors for s38(1) TCGA purposes.