INTM603900 - Transfer of assets abroad: Information powers: Objections received to providing information

Where a person raises an objection to a Notice on the grounds that the transactions concerned are outside the scope of ITA07/S748, attention can be drawn to the provisions of that section which authorise an Officer of HM Revenue and Customs to request particulars about

“transactions which in the opinion of the officer should properly be investigated for the purposes of this Chapter even though in the person’s opinion no liability to income tax arises under this Chapter”.

The issue of a Notice under ITA07/S748 is considered to place the recipient under an obligation to take all reasonable steps to find out such of the requested particulars as they do not already know. The person must have the ability to comply with the Notice, and cannot be compelled to produce information which does not exist (for example, audited accounts if none have been prepared) or, in the light of evidence, that person is not able to produce.

The absence of formal accounts does not mean that management accounts or management information in a company’s records cannot be produced to comply with a suitably worded Notice.

It is important to bear in mind that sometimes there may be legal barriers preventing an individual from obtaining, for example, particulars from trustees outside the UK tax area. In addition, a company director may object to providing information on the basis that the consent of the Board of Directors is required.

In a case which came before the Special Commissioners in 1987, the taxpayer applied for postponement of penalty proceedings on the grounds that he had been served with an Order of the Deputy Bailiff in Guernsey, prohibiting him from disclosing any information. The Special Commissioner ruled that a declaration by a Guernsey Court that confidentiality should be preserved was no defence against a Notice under (what is now) ITA07/S748.

In such cases the particular circumstances should be looked at carefully and, if necessary, the views sought of the technical specialist in Personal Tax International, Liverpool (see INTM604440).