No useful purpose in enforcing the information notice

The taxpayers a married couple were shareholders in a UK company. In July 2012 they transferred B shares to the husband's father who was resident in Cyprus. He received dividends from the shares. He made loans to the couple and paid towards their children’s school fees.

After an enquiry HMRC issued discovery assessments on the basis that the transfer of assets abroad or settlements provisions applied so that the dividends were taxable on the taxpayers.

HMRC also sent the taxpayers a FA 2008 Sch 36 information notice requesting statements for UK and overseas bank accounts as well as copies of the directors' loan accounts.

The taxpayers appealed on the basis that the documents were not reasonably required for the purposes of checking their tax position. They said they had provided all the information HMRC required with full explanations of the payments made and received by the various individuals....