Weekly case highlights ― 17 May 2021

Produced by Tolley
Weekly case highlights ― 17 May 2021

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

  • Weekly case highlights ― 17 May 2021
  • Income tax
  • Stephen J Mullens v HMRC
  • Capital gains tax
  • John Douglas Wardle v HMRC
  • Mr John Tenconi v HMRC
  • VAT
  • WM Morrison Supermarkets plc v HMRC
  • Tax administration
  • Raymond Tooth v HMRC
  • More...

Weekly case highlights ― 17 May 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.

Income tax

Stephen J Mullens v HMRC

This is a case about the taxation of payments which the taxpayer claimed were gifts or non-taxable inducement payments. The taxpayer was the legal adviser to the Bernie Ecclestone family and there was no doubt that the payments were made by Mrs Ecclestone and / or trusts and companies associated with the family. The question was the true character of the payments for tax purposes. The sums involved are astonishing ― the total amount exceeds £40m. The taxpayer’s counsel tried to put this in context: ‘Born in Croatia, Mrs Ecclestone became a woman of vast wealth with the habit, quite common among people of her class and type, of making what, to most, would seem to be huge payments for no particular reason, rather as a rich aunt might give big presents to her nieces, nephews and close friends.’ The tribunal was not impressed by this vague assertion and wanted evidence to show precisely the circumstances of the payments. This was not forthcoming. Mrs Ecclestone did not give evidence and the taxpayer’s account was extremely vague about the circumstances. Indeed the tribunal was frank in saying that it not satisfied that what he had told it was true. A flavour of how the tribunal approached matters can be seen in the following extract.

It has been found that there is a handwritten note [From Mrs Ecclestone] dated 24 July 2012. It reads as follows:

‘I am very

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