fbpx

Tax Investigations – Judge Authorises Disclosure of Credit Card Bills

19th August 2019 By Arman Khosravi

To what extent are the tax authorities entitled to delve into what would otherwise be your private financial information? The High Court tackled that issue in authorising disclosure of a wealthy businessman’s credit card statements to HM Revenue and Customs (HMRC) as part of a cross-border investigation into his tax affairs.

The Swedish businessman claimed not to be subject to Swedish tax on the basis that he had emigrated to Switzerland. The Swedish tax authorities considered that he remained ordinarily resident in Sweden and requested HMRC’s assistance in investigating the matter. HMRC responded by issuing a third-party notice against a London-based credit card company, requiring disclosure of the businessman’s statements. The notice was approved by the First-tier Tribunal (FTT) prior to service.

In challenging that decision, the businessman argued that information contained within the request for assistance was contradictory, wrong and implausible. It was submitted that HMRC could not rationally have concluded that disclosure of the statements was reasonably required for the purpose of checking his tax position, within the meaning of Schedule 36 of the Finance Act 2008.

In dismissing the judicial review challenge, however, the High Court noted that third-party notices are subject to judicial monitoring, rather than an adversarial process, and that they can only be challenged on limited grounds. HMRC were not required, before issuing the notice, to consider the merits, nature or extent of the investigation. It was sufficient that the Swedish tax authorities were engaged in a genuine and legitimate inquiry that was neither irrational nor being conducted in bad faith.

There was a rational connection between the credit card statements and the issue of whether the businessman was tax resident in Sweden or Switzerland. Credit card purchases of meals, consumables or accommodation within a particular geographic location would support an inference that he was physically present in that location at the time of the expenditure.

Source: Concious

Latest News

Court Explores Alleged 'Grave Risk' in Child Abduction Case

28th March, 2024 By

Cross-jurisdictional disputes surrounding child custody can be complex but, in cutting through the complexities, the courts will always focus on the welfare of the children involved, as was evidenced in a High Court case centred on a child abduction. A father wrongfully removed his 5-year-old child from Lithuania during an agreed contact session and took him back to the UK. Prior to this abduction, a series of contested proceedings related to the child's custody had already taken place in the Lithuanian courts. The father had applied to have the child returned...

Tenant Succeeds in Reducing Service Charges

26th March, 2024 By

A case recently decided by the First-tier Tribunal (FTT) serves as a reminder to tenants to check the terms of their leases and to monitor the service charges they are asked to pay. The tenant of a ground-floor flat sought a determination of liability to pay service charges under Section 27A of the Landlord and Tenant Act 1985, in respect of the 2017-2022 service charge years. He challenged various charges, on grounds that they was no evidence that they had been incurred or that they had not reasonably been incurred. Although...

Risk Passing on Exchange of Contracts

20th March, 2024 By Arman Khosravi

Risk Passing on Exchange of Contracts   Between Exchange and Completion (where the property is freehold):- It is generally the responsibility of the seller to take care of the property and to keep it insured against damage. The buyer also has a responsibility to insure the property from the exchange of contracts because of “Risk Passing”. There is no obligation on the seller to maintain buildings insurance once exchange has taken place.  It is therefore very important that buildings insurance for the property is in place before you proceed to exchange...

Court of Appeal Overturns Will Dispute Ruling

20th March, 2024 By

Unfortunately, will disputes can sometimes be drawn out long after the passing of the person who bequeathed their assets. This was so in a contentious probate battle which progressed to the Court of Appeal after a High Court judgment was challenged. The crux of the matter was a 2015 will made by a woman prior to her death at the age of 85. In that will, the woman bequeathed her home – her largest asset – to her only daughter. The daughter and the woman's three sons were to share...