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Discovery assessments issued on alternative basis on the same amount were invalid

By Arthur Weller, December 2024

Discovery assessments issued on an alternative basis could not assess both income tax and capital gains tax on the same amount and were therefore invalid. 

Summary 

Discovery assessments issued on an alternative basis could not assess both income tax and capital gains tax (CGT) on the same amount and were therefore invalid. 

Background 

HM Revenue and Customs (HMRC) considered that the appellant had realised a profit from property development activities and raised discovery assessments for the tax years 2007/08 and 2009/10. The assessments were made on an alternative (i.e., income tax and CGT) basis.  

However, the relevant assessments did not set out separate assessments for the tax due: (a) if the disposals were considered to be trading transactions; and (b) if they were considered capital disposals. Instead, the relevant assessments each contained a single

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