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Court allows HMRC’s challenge to rejection of its proof of debt (HMRC v Sanders, Re Deville (deceased) (2021))

Published on: 20 July 2021
Published by: LexisPSL
  • Court allows HMRC’s challenge to rejection of its proof of debt (HMRC v Sanders, Re Deville (deceased) (2021))
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Restructuring & Insolvency analysis: HMRC challenged the rejection of its proof of debt in the bankruptcy of the late Mr Deville, who had received a payment from HMRC of around £5m to which he was not entitled before his death. The trustee in bankruptcy had taken leading tax counsel’s advice that the closure notice relied upon by HMRC was subject to a technical defect, and as a result HMRC’s proof was rejected. The court upheld HMRC’s challenge on multiple grounds, holding that there was no defect; that if there was a defect it was cured by section 114 of the Taxes Management Act 1970 (TMA 1970); and the principle in Ex p James (1874) LR 9 Ch App 609 would not allow the trustee to reject the proof, creating a windfall of £5m for Mr Deville’s estate at the expense of the revenue. Written by Matthew Parfitt, barrister at Erskine Chambers. or take a trial to read the full analysis.

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