TC09630 - [2025] UKFTT 01071 (TC)

The UT said in Martland thatthere is “much greater prejudice for an applicant to lose the opportunity of putting forward a really strong case than a very weak one”, adding that the Tribunal should not “descend into a detailed analysis of the underlying merits of the appeal” but instead “form a general impression of its strength or weakness to weigh in the balance”.

There was no dispute (and we have found as a fact) that the Companies’ tax returns included deductions for rent paid to Mr Di Lellio, and that some or all of that rent was not included in Mr Di Lellio’s SA returns. Mr Di Lellio’s case, as put in his Notice of Appeal, was as follows:

“Mr Di Lellio denies that he received such rent but even if he had received the rent, then it would have been on-payable to the landlord. would either, upon receipt, have held it on constructive trust for the landlord; or, if he received it as income, he would have had expenditure (in the form of payment to the landlord) equal to the rent received, and therefore a profit of nil.”

In order to make that case, Mr Di Lellio would need to file evidence. His witness statement essentially reiterates the passage from the Notice of Appeal. The only documents in the Bundle were the following:

None of that evidence is contemporaneous with the assessments Mr Di Lellio is seeking permission to appeal. Mr Sanders told us that there were no other documents, but that if permission to appeal were given, Mr Di Lellio could ask his banks and/or the landlord for more documents. We can only make our decision on the basis of the material currently being relied on, and it is in any event unlikely that either the banks or the landlord would be able to provide documents relating to the years 2011-12 to 2015-16: even the most recent of those periods is over nine years ago.

On that basis, the only evidence before the Tribunal hearing the substantive case would be Mr Di Lellio’s oral evidence, unsupported by documents. Our general impression is that the merits of his case are weak.