In Gordon Anthony Yablon v HMRC [2016] TC 05539 a late application for enhanced protection was denied as the taxpayer did not have a reasonable excuse for missing the deadline.
When the pensions lifetime allowance was introduced in 2006 taxpayers could apply for ‘enhanced protection’ to protect them against any future charge:
- Applications had to be made by 5 April 2009.
- HMRC would consider a late application if the taxpayer:
- Had a reasonable excuse for not applying by that date, and
- Applied without unreasonable delay once that excuse ceased.
The taxpayer’s advisers had initially told him that he would have to sign a form by 5 April 2009 to apply for enhanced protection, but the form was never sent to him. The advisers later admitted they were liable for any loss he incurred as a result, but that he should submit a late application to mitigate this.
The FTT found that the taxpayer did not have a reasonable excuse for not filing his application on time:
- Although he had no detailed knowledge of pensions, he was aware that action had to be taken or else a substantial sum of money would be at stake.
- A reasonable taxpayer would have chased up his adviser to check on progress as the deadline approached, especially as his contact there had changed.
- Even if there had initially been a reasonable excuse, there was an unreasonable delay by both the taxpayer and his new advisers in submitting the application.
The late application for enhanced protection was therefore refused.
Links
Our subscriber guide: Pensions: tax rules and planning
Case reference: Gordon Anthony Yablon v HMRC [2016] TC 05539
