Jurisdiction(s):
United Kingdom

Barklem v HMRC: High Court upholds s 28B(4) TMA amendments after film partnership closure notices and s 54 settlement; declaratory relief refused; 'no partnership' argument belongs in judicial review

Published on: 08 April 2024

Published by a LexisNexis Tax expert

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Nigel Barklem v HMRC [2024] EWHC 651 (Ch)

Film 2K incurred substantial tax losses in the 1999–2000 and 2000–2001 tax years (the Relevant Years). These were presented as trading losses and allocated among the partners in line with TMA 1970, s 12AA. For those years, the Claimant submitted self-assessment returns claiming sideways relief for his share of the partnership losses pursuant to what were then sections 380–381 ICTA 1988. To obtain such relief, ICTA 1988, s 381(4) required that Film 2K’s activities amounted to a trade conducted on a commercial footing, with profits that could reasonably be expected to be realised. HMRC opened enquiries into Film 2K’s partnership returns for each of the Relevant Years within time. It also told the Claimant that enquiring into the partnership return triggered deemed enquiries into his personal return under TMA 1970, s 28B(4). Under that provision, if the partnership return is amended, HMRC may amend each partner’s self-assessment to make matching adjustments giving effect to the partnership amendments, issuing Section 28(4) Notices. This was so as to ensure that consequential changes were carried through to each partner’s position, in manner contemplated by statute and the framework for issuing Section 28(4) Notices. HMRC placed reliance...

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