Gary Ives v The Commissioners for HMRC

Decision date: 13 November 2023

Neutral citation: [2023] UKFTT 968 (TC)

Overall AI summary confidence: high

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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 HMRC closure notices and discovery assessments treating profits from three property disposals as income, plus alleged undeclared rental income and a 2010/11 receipt. The Tribunal held the disposals were not trading but capital gains qualifying for Private Residence Relief, that HMRC had not proved deliberate omission of earlier rental income so the time-barred discovery assessments/penalties failed, and that a modest Fullbrooks 2010/11 receipt is taxable. The Tribunal also held a closure notice may be read in context to permit alternative CGT/PPR treatment where linked correspondence shows the officer considered that alternative.

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: medium

A closure notice must be read in context (including linked officer correspondence) and can encompass alternative tax liabilities such as CGT/PPR where that context shows the tax officer considered the correct tax liability arising from the transactions; factual determination whether property disposals are trading requires holistic application of the badges of trade with weight to the contemporaneous and witness evidence.

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 criticised HMRC’s preparation of its hearing bundle and noted that isolated documentary inconsistencies do not necessarily displace consistent oral witness evidence if not put to witnesses as deliberate falsehoods.

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