In R (Hely-Hutchinson) v HMRC [2017] EWCA Civ 1075 the Court of Appeal found in favour of HMRC: the taxpayer did not have a legitimate expectation that his Mansworth v Jelley loss relief claims would be allowed on the basis of incorrect HMRC guidance.

 Mr Hely-Hutchinson had submitted capital loss claims for 1999-2002 following HMRC’s 2003 published guidance.

HMRC appealed to the Court of Appeal on the following grounds:

Decision of the Court of Appeal

The Court of Appeal found that:

The Court further found that whether the withdrawal of the 2003 guidance was incompatible with Article 14 of the European Convention on Human Rights as submitted by the taxpayer, was not relevant,  and upheld HMRC's appeal. The technical point regarding the availability of the losses claimed has been remitted back to the First-tier Tribunal to decide.

UPDATE: An appeal to the Supreme Court has been refused. The taxpayer has appealed the closure notices on eight grounds, six of which are struck out. The ground that the enquiries were not validly opened can be taken forward in respect of one closure notice. The other ground, that the guidance on which the taxpayer relied was unlawful and that HMRC failed to apply the law correctly was not objected to by HMRC and stands. We now await the decision of the FTT on these points and on the remittance of the availability of the losses (as above).

External links:

R (Hely-Hutchinson) v HMRC [2017] EWCA Civ 1075