EM3242 - Discovery: partnerships, CTSA and SDLT: CTSA discovery determinations

General

A discovery determination is the counterpart to a discovery assessment.

Discovery determinations should be made when a discovery relates to a reduction of overstated losses, or overclaimed, or overstated relief, and leads (or may lead) to additional tax liability either

  • for a different period from that to which the discovery relates or
  • for a different company.

You can only make a discovery determination when the company has already delivered a return.

If the discovery leads to a loss of tax for the period to which the discovery relates then a discovery assessment should be made in the way described in the relevant guidance pages.

A discovery determination must satisfy the same conditions and shares the same time limits as a discovery assessment. For more information, see EM3231 and EM3213.

Further discovery assessments/determinations

Once a discovery determination has been issued, there might be a need to issue a discovery assessment or determination for another accounting period for the company or another company in order to give effect to the original discovery determination.

If a further discovery assessment/determination does need to be issued, it should be done within the relevant time limit. 

Paragraph 42(2) removes both the restrictions set out in Paragraph 43 and 44 when you make a discovery determination that simply gives effect to a different discovery determination made in relation to an amount stated in another company's tax return.

Paragraph 42(2A) also removes both of these restrictions in respect of any income or chargeable gains in relation to which the company has been given a notice, after enquiries have been completed into the return, under

  • s184G or s184H of TCGA92 (avoidance involving capital losses)
  • s81(2) TIOPA10 (schemes and arrangements designed to increase relief)

‘Determination’

Whilst both terms include the word 'determination', a ‘discovery determination’ under Paragraph 41(2) is totally different from a 'revenue determination' under Paragraph 36 or 37.

As mentioned above, you can only make a discovery determination when the company has already delivered a return.

In a similar way, you can only make a revenue determination when

  • the company has not delivered a return, or
  • it only partly complies with a notice to deliver a return.

For further guidance on revenue determinations see CTM95300.