Parties must share the costs equally

This was a decision on costs relating to an appeal on whether capital gains tax entrepreneurs’ relief was available on a disposal of loan notes by the taxpayers in 2014. Ultimately HMRC agreed the relief was available and the taxpayer agreed the amount of the gains to be charged at the lower rate. This was formalised in an agreement under TMA 1970 s 54 as a result of which the First-tier Tribunal had ‘no further role to play in the determination of the substantive appeal’. 

On costs HMRC said each party should pay its own because the matter had been settled in effect without the tribunal’s input. 

The taxpayers said they had won so HMRC should pay.

The tribunal said: ‘There is no general rule that costs should be borne by the unsuccessful party unless the circumstances dictate otherwise. Rather the rule is to seek just...