Amendment or assessment?

Lapse of a declaration of intention to claim rollover relief

The taxpayer made a declaration for rollover relief (TCGA 1992 s 153A) for gains it had made on the sale of business assets in the accounting period to 31 December 2007. In 2013 HMRC said that because the taxpayer had not acquired any replacement assets within the three-year time limit for rollover relief to apply the declaration ceased to have effect. It amended the 2007 return and assessed the company to tax on the gain from 2007.

The First-tier Tribunal allowed the taxpayer’s appeal and HMRC took the case to the Upper Tribunal.

The taxpayer said HMRC should have raised a discovery assessment (FA 1998 Sch 18 para 41) giving it power to make an assessment to make good a loss of tax that resulted from relief that had become excessive. This would have allowed...