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Deductions claimed were not allowable and discovery assessments and penalties were upheld

By Mark McLaughlin, October 2023

Deductions claimed by the appellants on a property disposal were not allowable, and discovery assessments were upheld, but the error was careless rather than deliberate and a penalty suspension was upheld.

On 30 January 2017, the appellants submitted their self-assessment returns for 2015/16 but did not include any capital gains tax (CGT) details. However, HM Revenue and Customs (HMRC) held Valuation Office information that the appellants sold a property they had jointly owned on 28 October 2015. In May 2018, HMRC wrote to each appellant intimating that HMRC was aware they had purchased and disposed of a property and not declared the gain or trading profit arising from the disposal. HMRC requested that detailed information set out in a schedule attached to the letter be provided to HMRC by 15 June 2018. However, nothing was provided. 

On 22 June 2018, HMRC issued an information notice (under FA 2008, Sch 36) requiring the full information to be

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