Discovery assessments on offshore trust loan interest benefit could not validly be issued for the tax years in question under the extended 12-year time limit for offshore matters in the absence of careless behaviour but could be issued under the ‘requirement to correct’ regime.   

The appellant was the beneficiary of loans from an offshore trust. From 2013/14 onwards, no interest was payable on the loans, and this gave rise to a taxable benefit charge under the chargeable gains legislation. However, the tax was erroneously not included on the appellant’s tax returns.  

On 21 December 2018, the appellant made a disclosure under the worldwide disclosure facility for tax payable in respect of the tax years 2014/15 to 2016/17. HM Revenue and Customs (HMRC) opened an enquiry. At the closure of the enquiry, it transpired that tax was also due for 2013/14. HMRC raised discovery assessments for 2013/14 to 2016/17 on 9