Failed CGT planning and excessive penalties
9 June 2009 in Capital gains, Case law, International, Investigations Coll and Coll v HMRC [2009] UKFTT 61 concerned a CGT planning scheme which failed and a related penalty determination which was much reduced.
The findings of the Tribunal are unremarkable. These being that TCGA 1992, s.137 is to be applied purposively, and that the determination of a penalty under TMA 1970, s.95, is to be made only with reference to the facts leading to the relevant assessment of tax.
But what is noteworthy is how both sides, the taxpayers and the Revenue, come across as being so utterly unsympathetic.
The taxpayers were serial adviser hoppers, happy to attribute blame to anyone but themselves, and despite their bullish approach they would, one suspects, have succeeded in their capital gains tax planning if it were not for the taxpayers being stupid enough to expose themselves to a subsequent investigation for an unrelated tax fraud. Well, that and being dumped in the mire by a negligent PWC .
As regards the Revenue, goodness only knows what they were thinking. It is not apparent from the judgment why, when arguably having a case for criminal prosecution, the Revenue chose to continue the pursuit of an unsustainable civil settlement. Whilst a successful prosecution would not have been in the bag, we have certainly seen weaker cases proceed to prosecution and the evidence submitted to the Tribunal would have played far better instead before the Crown Court. One has to wonder over whether the internal machinations of the Revenue went horribly wonky in their earlier working of the Code of Practice 9 civil investigation, with the subsequent frustrations of the Revenue manifesting themselves in the proracted hissy-fit before the Tribunal.
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