Unfair advantage

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

The taxpayers’ appeal was dismissed by the Special Commissioners the High Court and the Court of Appeal and was remitted to the Special Commissioners by the First-tier Tribunal to determine the amount of the CGT assessment.

On the day of the hearing the taxpayers’ adviser was arrested on suspicion of false accounting and cheating the Revenue. The hearing was postponed.

The taxpayers applied to have HMRC debarred from taking part in further hearings on the ground the department had obtained privileged material about the taxpayers’ affairs which amounted to an abuse of process.

The issue proceeded to the First-tier Tribunal which decided it did not have the jurisdiction to make the order.

The taxpayers appealed.

The Upper Tribunal said the First-tier Tribunal had made its...