Correct discovery

HMRC issued discovery assessments in 2005 demanding tax in excess of £30m on the taxpayer for 1998/99.

The assessments were made because the taxpayer was found to be resident and ordinarily resident for the year although he had previously claimed to not be so.

His appeals to the First-tier Tribunal and Upper Tribunal (Tax and Chancery Chamber) were dismissed; he looked to the Court of Appeal.

Both tribunals had accepted the taxpayer had been UK-resident for the year in question and when the enquiry window had closed an officer of HMRC could not reasonably have been expected to be aware of the undercharged tax.

They held that the discovery assessments had been properly made under TMA 1970 s 29.

The Court of Appeal said that although the conditions for the Revenue to make a discovery were tightened following the introduction...