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Levy – Tribunal rejects application for final and partial closure notices

30 August 2019.

In The Executors of Mrs R W Levy v HMRC [2019] UKFTT 418 (TC), the First-tier Tribunal (FTT) has held that HMRC was not required to issue either a final or partial closure notice.


Mrs Levy submitted to HMRC self-assessment tax returns in respect of tax years 2014/15 and 2015/16, within which she stated that she was not domiciled in the UK and claimed to be subject to the remittance basis of taxation. 

HMRC enquired into Mrs Levy's returns, with a focus on her domicile status. Mrs Levy died in August 2018. 

Mrs Levy's executors applied to the FTT for a direction that HMRC issue final closure notices in respect of its enquiries, pursuant to section 28A, Taxes Management Act 1970 (TMA).  

HMRC concluded that despite being born in the US, Mrs Levy had acquired a domicile of choice and had been domiciled in the UK for the relevant tax years. HMRC's decision was conveyed to Mrs Levy's executors in a letter dated 29 January 2019. Despite this, the executors maintained their application and resisted the provision of information to HMRC concerning Mrs Levy's non-UK income and gains on the ground that she had been domiciled in the US in the relevant tax years and the information was therefore irrelevant to HMRC's enquiries. 

HMRC subsequently issued an information notice, pursuant to paragraph 1, Schedule 36, Finance Act 2008, seeking the information. The notice also requested information for the tax year 2016/17, in relation to which HMRC had also opened an enquiry (the application for a direction that HMRC issue final closure notices did not extend to the enquiry in relation to tax year 2016/17). The executors  appealed against the information notice on 2 April 2019.

The executors notified the FTT on 18 April and 4 May 2019, that if the application for a final closure notices were to be dismissed, they wished, in the alternative, for the FTT to direct that a partial closure notice be issued in respect of Mrs Levy’s domicile status for tax years 2014/15 and 2015/16. 

FTT decision

The application for final and partial closure notices and the appeal against the information notice were dismissed.  

With regard to the application for final closure notices, the FTT noted that HMRC had already reached a conclusion with regard to domicile, and so the continuation of the enquiry was to determine the amount of tax payable. It was not disputed that HMRC did not have sufficient information to calculate the increased amount of tax due for the relevant years if it was to conclude that Mrs Levy was not entitled to the remittance basis. In the view of the FTT, it would be difficult to determine how long it would be appropriate for the enquiry to continue and it was not unreasonable for HMRC to wish to consider the totality of the evidence once gathered. The FTT therefore concluded that HMRC had reasonable grounds to continue with its enquiries. 

Turning to the executors' request for partial closure notices, the FTT was of the view that HMRC does not have the power, under section 28A, TMA, to issue a partial closure notice in relation to a matter where the amount of tax is unknown. In introducing the partial closure notice regime, the FTT said that Parliament could be assumed to have been aware of the decision in R (Archer) v HMRC [2016] EWHC 296, which determined that closure notices had to include the amount of tax purportedly due. In the view of the FTT, the legislative amendments made to accommodate partial closure notices were intended to operate in the same way as final closure notices. 

As the FTT concluded that HMRC should not issue closure notices, for the reasons given above, it also directed that the executors should proceed to provide the information requested by HMRC in the information notice, and the appeal against the information notice was dismissed. 


The FTT's conclusion that HMRC could not issue a partial closure notice without specifying the increased amount of tax due conflicts with the FTT's decision in Embiricos v HMRC [2019] UKFTT 0236, in which it was held that a partial closure notice could be issued in circumstances where the amount of tax that would be payable was unknown. Given these conflicting decisions and the importance of this area of the law, clarification of the law  from a higher court would be welcome. 

The decision can be viewed here