In Anthony Outram & Ross Outram v HMRC [2021] TC8107, the First Tier Tribunal (FTT) dismissed appeals against discovery assessments relating to a tax avoidance trading loss scheme. The taxpayers were not trading, deliberately filed inaccurate returns and the discovery assessments were valid.

The appellants, two brothers whose appeals were joined as they were identical, had participated in an undisclosed tax avoidance scheme. HMRC became aware of their involvement following a raid in 2010 on the scheme provider, Montpelier Tax Planning, as part of a criminal investigation.

The FTT dismissed the taxpayers’ appeals against the assessments. The judge said the brothers were "less than compelling witnesses" even allowing for the fact the events took place 16 years ago.

Useful guides on this topic

Badges of Trade: Are you trading or not?
Are you trading, running a business, or just buying and selling investments? The 'Badges of Trade' are a set of indicators, built up over time by the courts, to decide when an activity is a trading or investment activity.

Losses, trade losses and sideways relief
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Losses (sideways): Restriction for uncommercial trades
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How to appeal a decision of HMRC
Key steps in appealing a decision of HMRC.

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? Case law tracker.

Discovery assessment and time limits
FREEVIEW: How far HMRC can go back?

Penalties: Error in a return or document
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Penalties: Deliberate Behaviour
There is no definition of 'Deliberate Behaviour' in the tax legislation. This guide considers case law to determine how the courts might view certain behaviours and whether they are deliberate or not.

Schedule 36 information notices
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External link

Anthony Outram & Ross Outram v HMRC [2021] TC8107 

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