Discovery is still a discovery and does not go stale

The taxpayer transferred a pension from a registered scheme to an overseas pension scheme. HMRC decided the transfer gave rise to unauthorised payments charge (40%) and surcharge (55%) (FA 2004 s 208 and s 209) because the scheme was not a qualifying overseas scheme. It raised discovery assessments to collect the tax.

The taxpayer appealed saying HMRC was out of time to make a discovery. The First-tier Tribunal agreed and allowed the appeal.

HMRC appealed on the ground that staleness as a concept did not exist in the context of discovery assessments.

The appeal was stayed pending the Supreme Court’s decision in CRC v Tooth which also dealt with the timing of assessments. The court eventually ruled that there was no place for the idea that a discovery which qualifies as such should cease to do so by the passage of time [2021] STC 1049.

The Upper Tribunal therefore remade the...