C4: Income tax claims

Claim to avoid double taxation

 

"(1)     If on a claim made to the Board it appears to their satisfaction that a person has been assessed to tax more than once for the same cause and for the same chargeable period, they shall direct the whole, or such part of any assessment as appears to be an overcharge, to be vacated, and thereupon the same shall be vacated accordingly.

(2)     An appeal may be brought against the refusal of a claim under this section.

(3)     Notice of appeal under subsection (2) must be given—

(a)     in writing;

(b)     within 30 days after the day on which notice of the refusal is given;

(c)     to the officer of Revenue and Customs by whom that notice was given.” (TMA 1970 s.32(1))

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"“tax”, where neither income tax nor capital gains tax nor corporation tax nor development land tax is specified, means any of those taxes." (TMA 1970, s.118(1))

 

“No-one has ever supposed for a moment that the Revenue were intending to levy double taxation or doing anything other than keep open the various alternatives until the uncertainties as to whether the taxpayers had been engaging in trade and, if so, whether they had been so doing as individuals or partners had been resolved. It was obviously intended by the Revenue that if it were established that the taxpayers had been trading the capital gains tax assessment would fall away, and that if it were established that the taxpayers had not been trading the income tax assessments would fall away… I have been told that this provision [s.32] was intended to provide relief against double taxation. It would enable Mr. Coren, on whom the capital gains tax assessment was made, to reclaim the whole capital gains tax in the event that the income tax assessment on him and Mrs. Coren together was confirmed.” (Bye v. Coren 60 TC 116).

 

Broad approach to the same cause 

 

“In Coren the chargeable gain arose as a result of the disposal of the metals, and so did the Case I profit, and it seems it was obvious to Scott J that this was the “same cause”. In this case the gain also arose from the disposal of the shares, but the income tax charge arose on their acquisition, microseconds before the disposal. But we consider it would be pedantic in the extreme, not to say perverse, for us to hold that that makes a difference. We would hold that a “cause” covers all aspects of the same transaction, and we are fortified in this view by the very existence of ss 119A and 120 TCGA which clearly see a sufficient nexus between the acquisition and the disposal for there to be given the relief for which they provide.” (Norman v. HMRC [2015] UKFTT 303 (TC) Annex 2, §30)

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