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In Asif Bhikhi v HMRC [2020] TC7728, the First Tier Tribunal (FTT) held that a property transferred to a relative to raise funds was a chargeable disposal for Capital Gains Tax. There was no evidence that any trust had been created and even if there had, there would still have been a disposal.

Mr Bhikhi was the subject of a confiscation order following a criminal conviction.

The FTT dismissed the appeal and also upheld the penalties charged:

Transactions amongst family members can be fraught with difficulties when tax advice is not taken and there is a history of a family having a ‘what’s mine is yours’ attitude without formally documenting what has been agreed. It might seem overly formal and expensive to legally document all such transactions but in the long run, it can save a lot of time and money. In this case, as the judge pointed out, a formal trust document may not have helped the tax position.

Links

Discovery assessments
When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? What are your rights of appeal and defences?

Joint property: legal v beneficial ownership 
This practical guide considers the tax rules for joint property and the effect of making joint property elections. 

How to calculate a capital gain or loss
This is a guide to how to compute a capital gain (or loss) for individuals and trustees.

UK Trusts
This guide deals with the taxation of UK trusts.

External link

Asif Bhikhi v HMRC [2020] TC7728