Weekly case highlights ― 16 August 2021

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Weekly case highlights ― 16 August 2021
  • Property tax
  • Heather Whyte v HMRC
  • Employment tax
  • George Mantides Ltd v HMRC
  • VAT
  • Brough East Yorkshire Ltd v HMRC
  • KSM Henryk Zeman SP Z.o.o. v HMRC
  • SDLT
  • John Mason v HMRC
  • More...

Weekly case highlights ― 16 August 2021

These are our brief notes and thoughts on cases published in the last week or so which caught our eye and are likely to be of particular interest to tax practitioners. Full case reports and commentary on most of these cases will be included within our normal reference sources in the coming weeks.

Property tax

Heather Whyte v HMRC

This is an object lesson in what can happen when the witness evidence does not support the facts. The context here is the sale of land associated with a large historic house in the Midlands. The taxpayer, who was married to a property developer with a history of bankruptcy, purchased the estate when it was in a very run-down state. She did renovate the main house itself and moved in with her husband. However, even before the purchase had been completed, plans were put in place to develop part of the land for housing ― indeed the economics of the project only made sense if this was done. She filed her return on the basis that the sale of the plots of land was exempt from capital gains tax as they were part of her principal private residence. HMRC disagreed and raised assessments on two bases ― first that the disposals of the plots were trading transactions and, in the alternative, that if they were subject to CGT, no private residence relief was available.

The Tribunal took a forensic approach to establish the facts and was not helped by the fact that Mr Whyte, who was clearly the main driver behind the development, chose not to give evidence. Mrs Whyte’s explanations of what had happened were comprehensively rejected by the judge. There has been no instance in the recent case in which a taxpayer’s evidence has been so comprehensively ‘trashed’ (there is no other word for it). Paragraphs 320 onward must have been very painful for her to read: so many of them

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