No deal

Further evidence to reduce penalties

This was the third instalment of an appeal by the taxpayer in connection with information notices for income tax and inheritance tax in relation to his deceased father’s estate. In its first decision the Upper Tribunal imposed penalties of £75 000 for the taxpayer’s failure to comply with the two income tax information notices and £1.17m for his failure to comply with the inheritance tax information notice. These represented 100% of the tax at risk.

The Upper Tribunal later agreed to reconsider the previous decision because the evidence on the tax at risk had changed. The parties were asked to try to agree the correct tax due.

By the time of this instant hearing the income tax liability had been agreed at £1 250 (compared with HMRC’s original £80 000 estimate) but the inheritance tax remained in dispute. HMRC’s initial estimate had been...