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HMRC Not Required To Establish That Discovery Conditions Met At Preliminary Hearing

By Mark McLaughlin, June 2016
The taxpayer did not have the right to require HMRC to establish, at a separate preliminary hearing prior to his appeal hearing against a discovery assessment, the matters that HMRC must establish to show that the discovery assessment was validly made.

The appellant was ordinarily resident in the UK until 2000/01. He made a capital gain of some £84 million on a sale of shares during 2000/01. HM Revenue and Customs (HMRC) issued a discovery assessment (under TMA 1970, s 29) on the basis that the appellant was not entitled to be treated as neither resident nor ordinarily resident in the UK for tax purposes in his tax return for 2000/01.

The appellant contended that, in accordance with HMRC’s guidance on residence (booklet IR20), he was to be regarded as “provisionally non-resident and not ordinarily resident with effect from 12 March 2000.” He stated that this was a “red flag” which ought to have
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