“(1) An enquiry under section 9A(1) … of this Act is completed when an officer of the Board by notice (a “closure notice”) informs the taxpayer that he has completed his enquiries and states his conclusions. In this section “the taxpayer” means the person to whom notice of enquiry was given. (2) A closure notice must either— (a) state that in the officer’s opinion no amendment of the return is required, or (b) make the amendments of the return required to give effect to his conclusions. (3) A closure notice takes effect when it is issued. (4) The taxpayer may apply to the tribunal for a direction requiring an officer of the Board to issue a closure notice within a specified period. (5) Any such application is to be subject to the relevant provisions of Part 5 of this Act (see, in particular, section 48(2)(b)). (6) The tribunal shall give the direction applied for unless … satisfied that there are reasonable grounds for not issuing a closure notice within a specified period.”
“(1) If a person chargeable to income tax dies, the executor or administrator of the person deceased shall be liable for the tax chargeable on such deceased person, and may deduct any payments made under this section out of the assets and effects of the person deceased. (2) On neglect or refusal of payment, any person liable under this section may be proceeded against in like manner as any other defaulter.”
“(1A) A negligible value claim may be made by the owner of an asset (“P”) if condition A … is met. (1B) Condition A is that the asset has become of negligible value while owned by P. … (2) Where a negligible value claim is made— (a) this Act shall apply as if the claimant had sold, and immediately reacquired, the asset at the time of the claim or (subject to paragraphs (b) and (c) below) at any earlier time specified in the claim, for a consideration of an amount equal to the value specified in the claim. (b) an earlier time may be specified in the claim if— (i) the claimant owned the asset at the earlier time; and (ii) the asset had become of negligible value at the earlier time; and either (iii) for capital gains tax purposes the earlier time is not more than two years before the beginning of the year of assessment in which the claim is made; … … ...”
“1. Where an asset has become of negligible value, or a loan irrecoverable, the person who owns the asset or made the loan may be able to claim relief for tax purposes. This case is concerned with the position if the owner/lender has died without making such a claim. Can his personal representatives claim relief?”
“We find Miss Lemos’ submissions convincing. We can see no indication in the legislation that a negligible value claim can be taken as made at a time other than that at which it is submitted. While section 24(2) TCGA allows an earlier time to be specified as that of the notional sale and reacquisition, there is nothing comparable as regards the claim itself. Moreover, section 24(2)(b)(iii) and (iv) appear to contemplate a claim being made during a year of assessment rather than at its beginning or end. Further, we agree with Miss Lemos that the purpose and wording of section 24 suggest that a claimant must still own an asset at the point a negligible value claim is submitted in respect of it.”
“During the hearing, we floated the idea that the solution to the case might lie in identifying Mr Leadley and the Executors. On that basis, it would not matter that Mr Leadley owned the shares when they became of negligible value and the Executors owned them when the negligible value claim was submitted. Treating Mr Leadley and the Executors as one, it could be said both that the claim was made “by the owner” for the purposes of section 24(1A) TCGA (since the claim was made by the Executors) and that the shares had become of negligible value “while owned by P” for the purposes of section 24(1B) (since they were owned at the time by Mr Leadley).”
“It seems to me that this section [34] has always been and remains concerned only with assessments by the Revenue. This is made clear by reading s.34 in conjunction with s.36 which was obviously intended to extend the time limits in cases of fraudulent or negligent conduct by the taxpayer. Section 36 can have no application in the case of a self-assessment by the taxpayer because that is not “an assessment on any person ... for the purpose of making good to the Crown” a loss of tax. It would involve the taxpayer in effect alleging negligence or fraud against himself. Mr Baker ultimately accepted this.”
“The suggestion that s.34 can apply to the taxpayer is also, I think, inconsistent with the structure and provisions of TMA in relation to the audit of self-assessments made by the taxpayer. …. … If s.34 does apply to self-assessment including amendments to self-assessments, then one has two inconsistent time limits to deal with. This was clearly not what was intended and it is avoided if one gives to the word ‘assessment’ in s.34 a more limited meaning which excludes self-assessment by the taxpayer.” … it follows that a closure notice under s.28A is not within s.34 because although served by the Revenue it has the effect of amending the taxpayer’s self-assessment which is not an assessment within the meaning of s.34 and an amendment to it cannot change its character. I would, therefore, for these reasons alone have dismissed the appeal on the first issue.”
“But if I am wrong about this and s.34 is not excluded simply because s.28A(1) provides for the amendment of the taxpayer’s self-assessment, then I need to consider Mr Grodzinski’s specific arguments which relate to these provisions.”
“… Although I prefer to base my reasons for this on the non-application of s.34 to self-assessments by the taxpayer (and therefore to amendments of such self-assessments) I accept the submissions of Mr Grodzinski on this point if I am wrong about that. The draftsman has been careful in his choice of terminology and s.28A does not involve an assessment within the meaning of s.34. On Mr Baker’s argument the time limit would have expired in this case solely due to the delaying tactics of his clients and the Revenue, in order to serve the closure notices, would have to rely on allegations of negligence and fraud. This seems to me to be an unlikely structure for Parliament to have adopted. Much more likely is that any possible delay in achieving finality following an audit inquiry could be dealt with by the inclusion of a right to apply for a direction for closure which was granted by s.28A(4). In my judgment this was the solution adopted.”
“Everyone was agreed that as a matter of common law, the personal representatives of a deceased person become the owner of the deceased’s assets at the moment of his death. Any income arising on those assets after that date is the liability of the personal representatives because it is their income.”
“Common law I was not referred to the common law provisions affecting personal representatives, which is not surprising as neither party was represented by lawyers. While I have been without the benefit of submissions on the point, it seems to me that as a matter of common law the personal representatives do represent the deceased in respect of all assets. They are his heirs and assigns. The right to make a claim must under common law transfer on death to the personal representatives, and it seems to me that under common law the executors would be able to make on behalf of Mr Leadley any claim which he could have made, unless the taxing statute expressly provided that the claim died with Mr Leadley. There is no such express provision.”
“An enquiry is completed when an officer of HMRC (O) by notice (a) informs the person to whom notice of enquiry was given that O has completed their enquiries and (b) states their conclusions.”
“Now, there are three stages in the imposition of a tax: there is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment. That, ex hypothesi, has already been fixed. But assessment particularises the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person taxed does not voluntarily pay.”
“My Lords, I shall now permit myself a general observation. Once that it is fixed that there is liability, it is antecedently highly improbable that the statute should not go on to make that liability effective. A statute is designed to be workable, and the interpretation thereof by a Court should be to secure that object, unless crucial omission or clear direction makes that end unattainable.”
“(1) If a person chargeable to tax dies, the executor or administrator of the person deceased shall be liable for the tax charged on such deceased person and may deduct any payments made under this subsection out of the assets and effects of the person deceased.” and “(4) Where any person dies without having delivered a return of all his profits or gains chargeable to tax with a view to an assessment thereon in due course, an assessment in respect of profits or gains which arose or accrued to him before his death may, subject to the provisions of section forty-seven of this Act (which relates to the time allowed for making assessments), be made upon his executors or administrators, and the amount of the tax thereon shall be a debt due from and payable out of his estate.”
“(1) For the purpose of the charge of tax on the executors or administrators of a deceased person in respect of the income, or chargeable gains, which arose or accrued to him before his death, the time allowed by section 34, 35 or 36 above shall in no case extend more than 4 years after the end of the year of assessment in which the deceased died. [My emphasis] (2) In a case involving a loss of tax brought about carelessly or deliberately by a person who has died (or another person acting on that person’s behalf before that person’s death), an assessment on his personal representatives to tax for any year of assessment ending not earlier than six years before his death may be made at any time not more than 4 years after the end of the year of assessment in which he died. (3) In this section ”tax” means income tax or capital gains tax.”
“(1) An assessment on a person in a case involving a loss of income tax or capital gains tax brought about carelessly by the person may be made at any time not more than 6 years after the end of the year of assessment to which it relates (subject to subsection (1A) and any other provision of the Taxes Acts allowing a longer period). (1A) An assessment on a person in a case involving a loss of income tax or capital gains tax— (a) brought about deliberately by the person, … may be made at any time not more than 20 years after the end of the year of assessment to which it relates (subject to any provision of the Taxes Acts allowing a longer period).”
“Where any person dies without having delivered a statement of all his profits or gains chargeable to tax with a view to an assessment thereon in due course, an assessment in respect of the profits or gains which arose or accrued to him before his death may be made at any time within the year of assessment, or within three years after the expiration thereof, upon his executors or administrators, and the amount of the tax thereon shall be a debt due from and payable out of his estate.”
“Where any person dies without having delivered a return of all his profits or gains chargeable to tax with a view to an assessment thereon in due course, an assessment in respect of profits or gains which arose or accrued to him before his death may, subject to the provisions of section forty-seven of this Act (which relates to the time allowed for making assessments), be made upon his executors or administrators, and the amount of the tax thereon shall be a debt due from and payable out of his estate.”
“(1) Subject to any provision in the Income Tax Acts under which assessments to tax at the standard rate are to be made by the Board, all assessments to tax at the standard rate shall be made by an inspector, and— (a) if the inspector is satisfied that any return under the Income Tax Acts affords correct and complete information concerning income in respect of which tax is chargeable at the standard rate, he shall make an assessment accordingly, and (b) if it appears to the inspector that there is any income in respect of which tax is chargeable at the standard rate and which has not been included in a return of income, or if the inspector is dissatisfied with any return of income, he may make an assessment to tax at the standard rate to the best of his judgment. (2) All assessments to surtax shall be made by the Board and— (a) if they are satisfied that a return of the income of an individual affords correct and complete information concerning the whole of his income computed in accordance with the provisions of the Income Tax Acts relating to surtax, they shall make an assessment accordingly, and (b) if it appears to them that there has been a failure to make a return of the income of an individual, or if they are dissatisfied with a return of the income of an individual, they may make an assessment to surtax to the best of their judgment. (3) If an inspector or the Board discover— (a) that any income which ought to have been assessed to tax at the standard rate or to surtax has not been assessed, or (b) that an assessment to tax at the standard rate or to surtax is or has become insufficient, or (c) that any relief which has been given is or has become excessive, the inspector or, as the case may be, the Board may make an assessment in the amount, or the further amount, which ought in his or their opinion to be charged. (4) All tax at the standard rate which is charged for any year on any person under subsection (3)(c) of this section may, notwithstanding that it was chargeable under more than one Schedule, be included in one assessment, and an appeal against an assessment under subsection (3)(c) of this section shall be to the Commissioners to whom an appeal would lie on a claim for the relief in connection with which the assessment is made. (5) Notice of an assessment under this section shall be served on the person assessed and shall state the time within which any appeal against the assessment may be made.”
“In these Acts it is impossible to rest any conclusion upon a particular word. The same word is in one section used in one sense and in another in a different sense. The preliminary ascertainment of amount is, however, generally spoken of by the verb ‘assess’, and its result by the noun ‘assessment’. But it is equally true that the final act of imposing liability on the taxpayer is spoken of sometimes by these same words, but sometimes also by the word ‘charge’. In popular language also the taxpayer is said to be ‘assessed’, when the meaning is that he has been rendered liable to pay. On the other hand the word ‘charge’ is sometimes used to express the preliminary act done by the subordinate officer, the assessor, and also, as I shall presently show, to express the final act done by the General Commissioners in fixing liability on the taxpayer.”
“In the Tax Acts …, any reference (however expressed) to a person being assessed to tax, or being charged to tax by an assessment, shall be construed as including a reference to his being so assessed, or being so charged— (a) by a self-assessment under section 9 … of the Management Act, or (b) by a determination under section 28C of that Act (which, until superseded by such a self-assessment, has effect as if it were one).”
“(2) Where— (a) a return is amended under section 28A(2)(b) …, and (b) the amendment is not made for the purpose of making good to the Crown any loss of tax brought about carelessly or deliberately by the taxpayer or a person acting on his behalf, sections … 43A and 43B apply in relation to the amendment as they apply in relation to any assessment under section 29. (3) References to an assessment in sections … 43A and 43B, as they apply by virtue of subsection … (2) above, shall accordingly be read as references to the amendment of the return. (4) Where it is necessary to make any adjustment by way of an assessment on any person— (a) in order to give effect to a consequential claim, or (b) as a result of allowing a consequential claim, the assessment is not out of time if it is made within one year of the final determination of the claim. For this purpose a claim is not taken to be finally determined until it, or the amount to which it relates, can no longer be varied, on appeal or otherwise. (5) In subsection (4) above ‘consequential claim’ means any claim, supplementary claim, election, application or notice that may be made or given under section … 43A … (as it applies by virtue of subsection (1) … above or otherwise).”
“(1) This section applies where— (a) … by virtue of section 28A(2)(b) of this Act an amendment is made on any person for a year of assessment, and (b) the amendment is not made for the purpose of making good to the Crown any loss of tax brought about carelessly or deliberately by that person or by someone acting on behalf of that person. (2) … where this section applies— (a) any relevant claim, election, application or notice which could have been made or given within the time allowed by the Taxes Acts may be made or given at any time within one year from the end of the year of assessment in which the amendment is made, and (b) any relevant claim, election, application or notice previously made or given may at any such time be revoked or varied— (i) in the same manner as it was made or given, and (ii) by or with the consent of the same person or persons who made, gave or consented to it (or, in the case of any such person who has died, by or with the consent of his personal representatives), except where by virtue of any enactment it is irrevocable. … (5) Where a claim, election, application or notice is made, given, revoked or varied by virtue of subsection (2) above, all such adjustments shall be made, whether by way of discharge or repayment of tax or the making of assessments or otherwise, as are required to take account of the effect of the taking of that action on any person’s liability to tax for any year of assessment. (6) The provisions of this Act relating to appeals against decisions on claims shall apply with any necessary modifications to a decision on the revocation or variation of a claim by virtue of subsection (2) above.”
“(1) Where a person dies whether before, on, or after the 6th day of April, 1932, an assessment or an additional first assessment (as the case may be), may be made for the year of assessment in which such person dies or for any one or more of the six years next preceding that year in respect of the profits or gains which arose or accrued to such person before his death, and the amount of the tax on such profits or gains shall be a debt due from and payable out of the estate of such person, and the executor or administrator of such person shall be assessable and chargeable in respect of such tax. (2) No assessment under this rule shall be made later than six years after the expiration of the year of assessment nor, in any case, later than three years after the expiration of the year of assessment in which the deceased person died. (3) The executor or administrator of any such deceased person shall, when required by a particular notice so to do, prepare and deliver to the inspector of taxes a true and correct statement in writing signed by such executor or administrator and containing particulars, to the best of his judgment and belief, of the profits or gains which arose or accrued to such deceased person before his death and in respect of which such executor or administrator is assessable under this rule, and the provisions of the Income Tax Acts relating to statements to be delivered by any person shall apply, with any necessary modifications, to statements to be delivered under this rule. (4) Nothing in this rule shall apply to or affect statements to be delivered or assessments to be made in respect of a trade, profession, or vocation carried on by two or more persons jointly.”
“Paragraph 1 deals with Rule 18 of the General Rules of the Income Tax Act of 1918. It provides that where any person dies, without having delivered a statement of all his profits or gains, an assessment in respect of such profits or gains may be made on his executors. A case recently arose in which a person having an income of over£2,000 a year made a complete return and died about a week before the assessment was signed. The Special Commissioners, on appeal, held that the existing rules did not enable an assessment to be made on the executors. The resolution substitutes a new rule which enables an assessment to be made on the executors, whether a return has been made or not. Some questions have been raised in other cases as to whether the Acts create any charge on executors, and words are introduced in the new Rule expressly providing that the executor or administrator shall be assessable and chargeable. The new Rule is so drafted as to enable assessments to be made for past years, subject to the time limit in sub-clause 2, but does not operate to validate any assessments already made. It merely enables assessments, including assessments for certain past years, to be made after the passing of the Act. Sub-clause 2 of the new Rule provides that assessments made under the preceding sub-clause shall be made not later than six years after the expiration of the year of assessments, but any such assessments must be made not later than three years after the expiration of the fiscal year in which the deceased died. There is no change in the law in regard to this time limit. The existing provisions embodied in Section 8 of the Finance Act of 1925, as amended by Section 2 of the Finance Act of 1921, are to the same effect. Sub-clause 3 of the new Rule provides for the making of returns by executors, to the best of their judgment and belief, in respect of profits or gains which accrued to a deceased person for any year for which an assessment could be raised under sub-clause 1. At present, there is no power to require an executor to make a return in respect of the income of a deceased person. It is to be observed that, under the law as it stands, if an executor desires to make a return, he may be faced with the position that he could be challenged in respect of any expenses being incurred in the preparation of the return. As the sub-clause imposes a statutory liability on the executor, the executor will, in future, be entitled to have any expenses which he incurs borne by the estate. … Mr. Blythe As I understand, this Resolution prevents any difficulty arising in cases where the deceased has made a return but has not been assessed before death and, secondly, it makes it obligatory on executors to furnish a return, whereas in the past, although there was power to assess, there was no power to compel a return. Mr. MacEntee That is right. The assessment almost inevitably led to some sort of return being furnished. It saved the executors time and it saved the Revenue Commissioners time.”
“(1) Where a person dies, an assessment or an additional first assessment, as the case may be, may be made for any year of assessment for which an assessment or an additional first assessment could have been made on the person immediately before his or her death, or could be made on the person if he or she were living, in respect of the profits or gains which arose or accrued to such person before his or her death, and the amount of the income tax on such profits or gains shall be a debt due from and payable out of the estate of such person, and the executor or administrator of such person shall be assessable and chargeable in respect of such tax. (2) No assessment under this section shall be made later than 3 years after the expiration of the year of assessment in which the deceased person died in a case in which the grant of probate or letters of administration was made in that year, and no such assessment shall be made later than 2 years after the expiration of the year of assessment in which such grant was made in any other case; but this subsection shall apply subject to the condition that where the executor or administrator— (a) after the year of assessment in which the deceased person died, delivers an additional affidavit under section 38 of the Capital Acquisitions Tax Act, 1976, or (b) is liable to deliver an additional affidavit under that section, has been so notified by the Revenue Commissioners and did not deliver the additional affidavit in the year of assessment in which the deceased person died, such assessment may be made at any time before the expiration of 2 years after the end of the year of assessment in which the additional affidavit was or is delivered. (3) The executor or administrator of any such deceased person shall, when required to do so by a notice given to the executor or administrator by an inspector, prepare and deliver to the inspector a statement in writing signed by such executor or administrator and containing particulars, to the best of such executor's or administrator's judgment and belief, of the profits or gains which arose or accrued to such deceased person before his or her death and in respect of which such executor or administrator is assessable under this section, and the provisions of the Income Tax Acts relating to statements to be delivered by any person shall apply with any necessary modifications to statements to be delivered under this section.” [1] The address for HWP was in Leyland, Lancs and was the same address as HWP, so I assume this was just a change of name. [2] “Stony Heating” was the name given to the scheme whose tax efficacy was finally decided in Steven Price & ors v HMRC[2015] UKUT 164 (TCC) (Nugee J and Judge Nowlan). [3] This must I think be a slip, as the “Working Wheels” final decision was made by this Tribunal in Flanagan & Ors v HMRC[2014] UKFTT 175 (TC) (Judge Colin Bishopp). [4] There were 6 hits for the term “exclusio” when I searched online in HMSO Tax Cases. Those 6 cases contained 5 different ways of setting out the maxim in Latin! [5] Or ratio decidendi for the older among us. [6]The Taxes Management Act 1880 can lay claim to be the predecessor of the Tax Law Rewrite Acts – see eg s 2 with its division of the parts). [7] An officer who was the predecessor of Her Majesty’s Inspectors of Taxes. [8] Subsection (1) which ends “The case shall set forth the facts and the determination, and the party requiring the same shall transmit the case, when so stated and signed, to the High Court within seven days after receiving the same, and shall previously to or at the same time give notice in writing of the fact of the case having been stated on his application, together with a copy of the case to the other party, being the surveyor or the appellant as the case may be.” [My emphasis] [9] The provision that currently applies to second tier appeals, and so is the successor to s 59 TMA 1880 and to s 56 TMA, is Rule 23 of theTribunal Procedure (Upper Tribunal) Rules 2008 (SI 2008/2698) (L.15). Rule 23(6) provides that when it receives an appeal the Upper Tribunal must “send a copy of the notice and any accompanying documents to each respondent.”. A respondent is defined in Rule 1(3) as “in an appeal … against a decision of another tribunal, any person other than the appellant who—(i) was a party before that other tribunal.”