Bare trustee was not liable to notify or to tax

The taxpayer a midwife in the NHS had about $900 000 in an account in her name with a bank in Singapore. HMRC opened an enquiry and raised discovery assessments on the basis there had been a deliberate failure to notify liability.

The taxpayer appealed. She said she was acting as bare trustee because the funds belonged to her parents-in-law who were resident in Hong Kong. She therefore had no personal liability to tax in relation to them and no obligation to notify HMRC. Further she was a basic rate taxpayer all her tax was subject to PAYE other than a small amount of interest from a building society so she did not need to complete a tax return.

The First-tier Tribunal said it was common ground that the taxpayer was the legal owner of the funds. The issue was whether a trust existed....