Tax analysis: In Accuro Trust (Switzerland) SA v HMRC, the First-tier Tax Tribunal (FTT) held that foreign property added to an excluded property trust in March 2006 when the settlor had become deemed domiciled in the UK was excluded property and that inheritance tax (IHT) paid in the mistaken belief that it was not, should be repaid. The natural meaning of the words meant that the additions were not relevant property and that HMRC’s view was not ‘generally received or adopted in practice’.

Tax analysis: In GW Martin & Co Ltd & another v HMRC, the First-tier Tax Tribunal (FTT) dismissed the appeals brought by the appellant companies, upholding HMRC’s PAYE income tax determinations and National Insurance contributions (NICs) decisions. The FTT held that payments the appellants made to employees under a marketed tax avoidance scheme were taxable earnings within the meaning of section 62 of the Income Tax (Earnings and Pensions) Act 2003 and section 3 of the Social Security Contributions and Benefits Act 1992.

Private Client analysis: The case of Louwman v Revenue and Customs concerned Ms Louwman, a UK resident non-domiciled taxpayer who had set up offshore protected property trusts on 7 March 2017, just prior to the implementation of the deemed domicile regime on 6 April 2017. Ms Louwman sought to shield income and gains in those trusts from taxation after she became deemed domiciled for the tax year commencing 6 April 2018, on the basis that the trusts were offshore protected property trusts and the income and gains in those trusts would not be attributed to her on an arising basis. HMRC assessed Ms Louwman to income tax on the basis that offshore income gains (OIGs) and accrued income profits (AIPs) that had arisen in the offshore protected trusts were subject to income tax on an arising basis. Ms Louwman resisted the assessments on the basis that these items of income were ‘protected foreign source income’. The matter went to the irst-tier tribunal for determination and the tribunal considered that the items of income were not ‘protected foreign source income’ on the basis that they could not be said to have a source, and particularly a foreign source. The tribunal therefore considered that they should be subject to income tax. The tribunal also considered that it was not appropriate to take a rectifying interpretation of the definition of ‘protected foreign source income’ in section 721A of the Income Tax Act 2007 (ITA 2007) even though OIGs and AIPs may have been omitted from the definition of protected foreign source income by the inadvertence of Parliament. Written by Ben Symons, barrister at Old Square Tax Chambers.

Tax analysis: In Withers, the First-tier Tax Tribunal (FTT) considered an appeal against a closure notice increasing the stamp duty land tax (SDLT) liability in respect of a land transaction, whose subject matter included land which was subject to a grazing agreement with a local farmer and a rewilding agreement with the Woodland Trust.

Tax analysis: In Parker Hannifin v HMRC, the First-tier Tax Tribunal (FTT) held that an information notice which required the taxpayer company to carry out searches across its directors’ emails for specified terms was valid, but that the requirement to disclose all of the resulting emails to HMRC was ‘far too wide’.

Tax analysis: In Realreed Ltd, the First-tier Tax Tribunal (FTT) held that the taxpayer’s letting of apartments did not constitute a supply of land that was exempt from VAT under Item 1, Group 1, of Schedule 9 to the Value Added Tax Act 1994 (VATA 1994). The FTT also upheld HMRC’s penalty for inaccuracies in the taxpayer’s VAT returns.

Tax analysis: In Bolt Services UK Ltd (Bolt) the First-tier Tax Tribunal (FTT) held that the taxpayer’s on-demand ride-hailing services fell within the scope of the VAT Tour Operators Margin Scheme (TOMS).

Tax analysis: In Rupert Grint v HMRC, the First-tier Tax Tribunal (FTT) found that the sales of occupation income anti-avoidance rules applied to a capital sum received by the taxpayer on the incorporation of his business. The anti-avoidance provisions were engaged as, although there were commercial reasons for the incorporation, one of the main objects of the arrangements was the avoidance or a reduction in income tax. The FTT also held that the closure notice was validly issued despite referring to the wrong legislative provision.

Tax analysis: In Littlewoods Ltd v HMRC, the First-Tier Tax Tribunal (FTT) found in favour of the taxpayer against HMRC’s decision to refuse the taxpayer’s claims to recover input tax costs incurred in producing product-specific photographs (eg studio, modelling, props) used in catalogues and on its website.

Tax analysis: In Raystra Healthcare Ltd, the First-tier Tax Tribunal (FTT) found that claims under the Coronavirus Job Retention Scheme must fail where the employees in question had not been included in a real-time information (RTI) return before the relevant deadline. The rules were clear and there was no discretion to make exceptions.

Tax analysis: In HMRC v IPS, the First-tier Tax Tribunal (FTT) agreed with HMRC that the respondent, IPS (an umbrella company providing PAYE payroll services in respect of individuals whose personal services were made available by recruitment agencies to end users), was a promoter in relation to arrangements which involved trying to avoid income tax and National Insurance contributions (NICs) by treating a portion of the payments made to the employees as a loan (referred to as the ‘ILO bonus’) rather than as income and that such arrangements were notifiable because they constituted a standardised tax product. The FTT further held that IPS did not have a reasonable excuse for failing to notify the arrangements within the required deadline and set a penalty of £900,000 for that failure.

Tax analysis: In HMRC v Industria Umbrella, the First-tier Tax Tribunal (FTT) held that, when considering the quantum of a penalty for the failure to notify arrangements under the disclosure of tax avoidance schemes (DOTAS) rules, the amount determined by the daily penalty calculation was insufficient, holding instead that the maximum £1m penalty was necessary. The FTT noted that the fees charged by the promoter were high-level, and given the question of whether the arrangements were notifiable was not complex, there was no reason for non-compliance.