D S Sanderson v HMRC

In D S Sanderson v HMRC [2016] EWCA Civ 19 (21 January 2016) the Court of Appeal found that a discovery assessment had been valid (TMA 1970 s 29).

Mr Sanderson’s tax return for the year 1998/99 had disclosed chargeable gains of £1.8m and capital losses of more than £2m. The losses had been attributed to a ‘beneficial interest in the Castle Trust’. Castle Trust was the vehicle of a capital loss scheme implemented by many taxpayers. The appeal against the decision of the UT upholding a discovery assessment turned on whether at the time the enquiry window had closed the relevant HMRC officer ‘could not have been reasonably expected on the basis of the information made available to him before that time’ to be aware of the underassessment of tax (TMA 1970 s 29(5)).

The UT examined three scenarios each of them assuming a...