Tax Journal

Tax liability and criminal confiscation

30 July 2012

The courts are absolutely correct to resist attempts by taxpayers to recognise a connection between determining liability for tax under the taxing legislation and monies paid in satisfaction of a confiscation order made under the Proceeds of Crime Act 2002.

In two recent cases, Martin v HMRC [2012] UKFTT 304 (TC) and Nugent v HMRC [2012] UKFTT 329 (TC), taxpayers advanced an argument that their tax liabilities were extinguished following payment of a confiscation order quantified by reference to benefit received from undeclared criminal income. Both cases came before the First-tier Tribunal sitting in Belfast, with Judge Ian Huddleston presiding. The issues in Martin v HMRC are particularly interesting. As well as discussing the circumstances in which discovery assessments can be made under TMA 1970 s 29, the Tribunal was required to consider the effect of ...

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