Lost rights

The taxpayer a chartered accountant took part in an avoidance scheme called Castle Trust. It generated a capital loss which he claimed in his 1997/98 return.

HMRC said the loss was artificial and refused the claim. The department amended the return to show tax due of £951 790.

The taxpayer appealed and sought to have the tax postponed. The Revenue accepted the appeal but not the postponement application and decided all the tax was collectible.

The department obtained judgment against the taxpayer who was declared bankrupt. He applied for permission to appeal against the bankruptcy petition but was unsuccessful.

A trustee in bankruptcy was appointed and the taxpayer was eventually discharged from bankruptcy. The trustee told HMRC he accepted the assessment and the taxman applied to strike out the taxpayer’s notice of appeal.

The First-tier Tribunal ruled the taxpayer had no legal standing...