Upper Tribunal Tax and Chancery Chamber

UT (Tax & Chancery) UT-2024-000113 - [2025] UKUT 00165 (TCC)

Fecha: 08-Abr-2025

THE GROUNDS OF APPEAL TO THE UPPER TRIBUNAL

THE GROUNDS OF APPEAL TO THE UPPER TRIBUNAL

The Appellant appeals to the Upper Tribunal (“UT”), based on narrative grounds of appeal, with permission granted by the FTT. The grounds were not numbered nor concisely identified but consisted of a general challenge to the FTT’s conclusions unfavourable to the Appellant. In essence, the grounds are that:

(1)

The FTT erred by holding that the Appellant was not permitted to make a claim for share loss relief in his tax return for 05-06 and it should be treated as relating to the 06-07 return. The ratio of the Supreme Court judgment in R (on the application of Derry) v HMRC [2019] UKSC 19 (“Derry SC”) is binding and schedule 1B TMA does not apply to share loss relief claims under ICTA. The FTT was wrong to distinguish Derry SC on the basis that it only applied to share loss relief claims under s.132 Income Tax Act 2007 (“ITA”). Thus paragraph 2(3), Schedule 1B does not govern a share loss relief claim made under s.574 ICTA. The claim can be made in either the year incurred or the preceding tax year and does not have to be treated as relating to the later year (06-07). (“The First Share Relief Issue”).

(2)

The FTT erred in finding that there was a valid closure notice in respect of the 06-07 return pursuant to s.28A TMA when it was not sufficiently clear: the figures referred to in respect of the relief claimed and denied were incorrect. The FTT failed to apply Raftopoulou v HMRC [2018] EWCA Civ 818 (“Raftopoulou”) in determining whether the closure notice of 25 July 2019 was valid, alternatively the FTT failed to give sufficient weight to the Appellant’s written and oral evidence that he did not understand the meaning of the closure notice. (“The Closure Notice Issue”).

HMRC, in turn, applied for permission to cross appeal against the FTT decision that the claim was made in the 05-06 return and hence that the Schedule 1A TMA enquiry was invalid. They submit that the FTT erred because the claim was not made in the 05-06 return. Even though included on its face, the information provided did not feed into the self-assessment calculation. Hence it was a standalone claim made outside the return and HMRC validly opened their enquiry into it (“The Second Share Relief Issue”).

We are satisfied that permission to appeal is required on the Second Share Relief Issue. Although HMRC contend for the same effect as the Decision – to deny the Appellant’s loss relief claim - they do so for different (additional or alternative) reasons, namely that there was a valid Schedule 1A TMA closure notice which provided an alternative and additional basis on which relief might be lawfully denied: see Oisin Fanning v Revenue and Customs [2022] UKUT 21 at [27]-[28] addressing HMRC v SSE Generation Ltd [2021] EWCA Civ 105:

“28(3) If the Respondent is seeking to persuade the FTT to make a different decision, it is likely to need permission to appeal. However, if the Respondent succeeded on a particular issue before the FTT because the FTT accepted one of a number of arguments while rejecting other arguments, the Respondent can raise those unsuccessful arguments in a Respondent’s Notice (see [77] of Rose LJ’s judgment [in SSE Generation]) because the Respondent would not, in so doing, be seeking a different decision.”

We grant HMRC permission to appeal on the Second Share Relief Issue because, for the reasons set out below, this ground of cross-appeal has a realistic prospect of success.

10.

The overall effect of the grant of permission to appeal and HMRC’s response to the notice of appeal is that all of the issues before the FTT, other than the third share loss relief issue, are now before the UT on this appeal.