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H Mehjoo v Harben Baker (a firm) and Harben Baker Ltd, Court of Appeal
The respondent was born in Iran in 1959. He had lived in the UK since 1971. He built a fashion business which he sold in April 2005 for £22m giving rise to a large capital gains tax (CGT) liability.
He took legal proceedings against his accountants for failing to tell him he should have sought specialist advice as a UK non-domicile in mitigating the tax.
Mr Justice Silber in the High Court ruled in the appellant’s favour finding the accountants had been negligent.
The Court of Appeal overturned the decision. Lord Justice Patten said “Accountants are not paid to give unnecessary advice” and he could see no reason why the respondent’s advisers would have raised the matter of non-domicile status when discussing the CGT due on the disposal.
He did not believe that the accountancy was obliged to advise their client about tax advantages ...
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