Case for discretion

Gains on part surrenders of life policies

The taxpayer filed paper self-assessment returns for 2005-06 2007-08 and 2008-09. They included gains on UK life insurance policies. HMRC calculated the liability resulting in tax due for each year of £1 217 £21 651 and £7 341 respectively.

The taxpayer claimed top-slicing relief but HMRC said this was not available. HMRC took county court action and obtained judgment. This was suspended because the taxpayer appealed to the First-tier Tribunal on the ground that no tax was due.

HMRC made two applications seeking to strike out parts of the taxpayer’s appeal and a third objecting to the taxpayer’s application for permission to make a late appeal in relation to the 2005-06 assessment.

The tribunal judge granted HMRC’s applications. This was because the tribunal did not have jurisdiction over interest on unpaid tax payments on account and balancing payments or county...