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Frosh and others v CRC, Upper Tribunal (Tax and Chancery Chamber)
Application for HMRC to issue closure notices
The taxpayers took part in arrangements intended to mitigate the effects of stamp duty land tax. The planning relied on FA 2003 s 45(3) to exempt from the tax the purchase of a property and s 71A to exempt the subsequent sale and leaseback transaction.
HMRC wrote to the taxpayers saying that the decision in Project Blue Ltd (TC2777) which had involved similar transactions supported its view that the scheme did not work. It invited them to settle by withdrawing from the scheme and paying the tax. The letter also asked for documents and information. The taxpayers objected to the request but HMRC sent another invitation to settle on the basis that until it had seen the documents it would not know whether the scheme had been implemented successfully.
The taxpayers therefore applied for closure notices. They did not provide the documents...
