Scope of discovery

Assessment of unauthorised payment charge and surcharge

The First-tier Tribunal had decided in an earlier decision (TC5366) the taxpayer was liable to the unauthorised payments charge and the surcharge in 2009-10. This was in connection with a transfer from his self-invested personal pension to another scheme LML Pension Scheme and from that to LML and CIM from which sums were lent to the taxpayer.

The issue was whether the tribunal should confirm the assessment that had been issued in March 2014 under the discovery rules in TMA 1970 s 29. The taxpayer said the scope of a discovery assessment was limited to the loss of tax discovered by the HMRC officer under s 29(1) – it related to the tax that was alleged should have been charged on the LML transfer. But because the tribunal had found this transfer was not an unauthorised payment (it...