EF Brosch & Ors v The Commissioner for HMRC
Decision date: 31 October 2023
Neutral citation: [2023] UKFTT 945 (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 case concerned whether HMRC could issue discovery assessments for SDLT where purchasers had used Cornerstone-promoted "Jeepster" and "Hummer" schemes, and whether the SDLT1 returns plus a standard disclosure note would have made a hypothetical HMRC officer aware of a tax insufficiency before the enquiry window closed. The First-tier Tribunal held the returns and disclosure note were inadequate to satisfy paragraph 30(3) Schedule 10 FA 2003, so HMRC's discovery assessments stood; an application to compel disclosure of privileged 2007 legal advice was dismissed.
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
The Tribunal indicates that a taxpayer’s standard-form disclosure that lacks sufficient factual detail or legal analysis will not, by itself, make a hypothetical HMRC officer objectively aware of an actual tax insufficiency for the purposes of paragraph 30(3) Schedule 10 FA 2003; at best such disclosure might prompt an enquiry but does not satisfy the statutory threshold for discovery assessments.
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 that the Needham Letter of 8 May 2007 (HMRC's preliminary view) did not, on the material before the Tribunal, change the conclusion that the returns and disclosure were inadequate to make an officer aware of an insufficiency. It also expressed that the hypothetical HMRC officer is to be assumed to have general competence and a reasonable understanding of the law, but not specialist knowledge beyond what is reasonable in the circumstances.