HMRC fails in its attempt to obtain disclosure of privileged documents

21 July 2012. Published by Adam Craggs, Partner

The important issue of disclosure of documents in the context of litigation before the First-tier Tribunal (Tax) (‘the FTT’) was recently considered in Peter A D Fisher, Stephen D Fisher and Anne P Fisher v HMRC [2012] UKFTT 335.

Although both the taxpayers and HMRC requested the other party to disclose various documents in preparation for a future hearing, for the purpose of this blog, I intend to limit my comments to HMRC’s request that the taxpayers provide instructions to counsel and a note of conference with counsel on the basis that privilege had been waived.


The taxpayers appealed against three assessments to tax under what was section 739 Income and Corporation Taxes Act 1988 which, readers will recall, was intended to prevent tax avoidance by individuals ordinarily resident in the UK by creating an income tax liability on them when transferring assets abroad.

The assessments in question were made following the purchase by Stan James (Gibraltar) Limited (‘SJG’) of the tele-betting business, Stan James (Abingdon) Limited (‘SJA’) in February 2000. The taxpayers held all the shares in both SJG and SJA.

HMRC applied for the disclosure of instructions to and note of conference with Counsel dated 19 December 2001 (‘the December 2001 documents’). HMRC contended that privilege had been waived over these documents because they had:

  1. been included in the taxpayers’ list of documents; and
  2. the taxpayers had already disclosed to HMRC two other sets of instructions to and note of conference with Counsel and privilege had therefore been waived.

The Decision

HMRC were unsuccessful. The FTT held that:

  • being listed in the taxpayers’ list of documents was not sufficient to waive privilege;
  • a waiver of privilege over the December 2001 documents could only have occurred where there had been an “alteration, amplification or extension of the advice already disclosed” – in this case if the December 2001 documents continued or related to the advice contained in the previously disclosed Counsels’ advice; and
  • the advice was given some considerable time after the transaction in question had taken place, and therefore could not have influenced the taxpayers’ decision to carry out the transaction.


Although taxpayers will no doubt be relieved that the FTT dismissed HMRC’s application, this case is a salutary reminder to taxpayers of the hidden dangers of disclosing to HMRC some, but not all, privileged documentation. In such circumstances, there is always the very real possibility that HMRC will seek, as they did in this case, to argue that privilege has been waived on other privileged material. The waiver of privilege is a complex area and taxpayers need to ensure that by waiving privilege in relation to some documents they do not thereby inadvertently waive privilege in relation to other documents which they do not wish to disclose to HMRC

[1] The legislation was redrawn by the Tax Law Rewrite Committee and is now contained in Chapter 2 of the Income Tax Act 2007.

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