Inappropriate evidence

The taxpayers took part in a capital gains tax avoidance scheme and claimed holdover relief. HMRC refused the claim.

The Special Commissioners the High Court and the Court of Appeal all dismissed the taxpayers’ subsequent appeals. The case was then remitted to the Special Commissioners to determine the amount of the capital gains tax assessment.

On his way to the First-tier Tribunal which had by then replaced the Special Commissioners the taxpayers’ adviser was arrested on suspicion of false accounting and cheating the Revenue – as a result of which the hearing was postponed.

The taxpayers claimed the taxman had carried out the arrest on the day of the hearing in bid to obtain sight of legally privileged material to embarrass them delay the hearing and pressurise them into settling the matter.

They applied for an order to the effect the tribunal should not...