Interest on accounts beneficially owned

The appeal covered two issues. The first concerned whether the taxpayer was liable to tax on interest received from bank accounts in his name but holding his father’s money. The First-tier Tribunal said the automatic position in such cases was that the named account holder was the legal and beneficial owner of the capital and interest unless there was ‘substantive proof to the contrary’. The tribunal decided that ‘on the balance of probabilities’ one account held cash belonging to the father but the taxpayer had not met the burden of proof in relation to other accounts. The judge reduced the tax due to allow for the interest on one account.

The second issue concerned the taxpayer’s pension. He and his wife divorced in 2012 and it was agreed she would receive half of his private pension income. However no formal sharing order was made. The taxpayer filed...