Upper Tribunal remits CGT appeal back to Tribunal for rehearing

12 February 2024. Published by Keziah Mastin, Associate

In M Campbell v HMRC [2023] UKUT 265 (TCC), the Upper Tribunal (UT) remitted the taxpayer's appeals against CGT assessments and penalties to the First-tier Tribunal (FTT), but upheld the FTT's conclusion that the taxpayer was not trading when he bought and disposed of several residential properties.


Mark Campbell (the Appellant) bought and sold four residential properties in quick succession between 2010 and 2016, and did not notify HMRC of any liability to tax. 

Following an enquiry, HMRC assessed the Appellant to income tax on the basis he was trading, or in the alternative, to capital gains tax (CGT). HMRC also issued penalties to the Appellant for deliberate failure to notify his liability to tax. The Appellant appealed the assessments and penalties to the FTT.

The FTT concluded that the Appellant was not trading (and therefore was not liable to income tax). However, the FTT concluded that the capital gains were not exempt under the personal residential relief provisions and the Appellant was therefore liable to CGT.

The Appellant appealed the FTT's decision to the UT on the grounds that he was not liable to CGT because the job-related accommodation exemption in section 222(8), Taxation of Chargeable Gains Act 1992, applied, and so he was entitled to full main residence relief. HMRC cross-appealed the FTT's decision on the trading issue.

The Appellant argued that he had been living with his parents providing care to his father under a contract of employment with the local authority so the family home was job-related accommodation, pursuant to section 222(8).

HMRC argued that the FTT had erred in its conclusion that the Appellant was not trading.

UT decision

The UT dismissed HMRC's cross-appeal on the trading issue and identified material errors in the FTT's decision regarding the CGT exemption. The FTT incorrectly considered whether the accommodation was provided 'for the purposes of the employment' whereas the statutory test was 'by reason of the employment' and overlooked the second condition in section 222(8) that the Appellant intended, in due course, to occupy the property sold as his only or main residence.

The UT therefore set aside the FTT's decision and remitted the appeal to a differently constituted FTT for a rehearing.


The UT also remitted the appeals against the penalties back to the FTT as it had not applied the correct test to determine deliberate behaviour on the part of the Appellant and had not given any reasons which would justify a finding of a deliberate failure to notify. In addition, the FTT had failed to consider whether HMRC’s approach to mitigation of the penalties was flawed. It is noteworthy that the UT remitted the case back to a differently constituted FTT in order for fresh findings of fact to be made. 

The decision can be viewed here.

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