Edward Newfield v The Commissioners for HMRC

Permission to appeal from the First-tier Tribunal requires an arguable material error of law. A finding of fact or evaluative judgment will amount to an error of law only in limited circumstances, including where it lacks evidential support, conflicts with the evidence, or permits only one reasonable conclusion.

New evidence cannot ordinarily be introduced to transform the case after the first-instance hearing. The applicant must show that the evidence could not reasonably have been obtained for use at trial, that it would probably have an important influence on the result, and that it is apparently credible. Even where those conditions are met, fairness and prejudice remain relevant.

The appellant challenged an assessment to capital gains tax arising from the disposal of land. The First-tier Tribunal dismissed his appeal and refused permission to appeal. The Upper Tribunal refused permission on paper, after which the appellant requested an oral reconsideration.

The appellant sought to challenge the FTT’s conclusion that he was treated as the beneficial owner of the property during his bankruptcy and at disposal. He relied on a previously undisclosed declaration of trust in favour of his children and sought to adduce new oral and documentary evidence. The central issue was whether there was any realistic prospect that the Upper Tribunal would admit that evidence and find an arguable error of law.

1. Permission to appeal. Section 11(1) of the Tribunals, Courts and Enforcement Act 2007 gives a right of appeal on a point of law. Permission should be granted only where the proposed ground is arguable and discloses a material error of law.
2. Errors of law involving factual findings. Such an error may arise where there is no evidence supporting a finding, the evidence contradicts it, or the only reasonable conclusion contradicts it. The same approach applies to inferences from primary facts and evaluative judgments. The trial is the first and last opportunity to present the evidence.
3. Admission of new evidence. The three-part test identified in Ladd v Marshall [1954] 1 WLR 1489, and considered in Ketley v HM Revenue & Customs [2021] UKUT 218 (TCC), required consideration. The evidence had to be unavailable despite reasonable diligence, probably important to the result, and apparently credible. Fairness and justice also had to be considered.
4. The proposed trust evidence might have influenced the outcome and was apparently credible. However, it was available throughout the HMRC enquiry and FTT proceedings. The appellant had numerous opportunities to produce it, including after the trust issue was identified in his skeleton argument, but gave no satisfactory explanation for failing to do so.
5. There was also a real risk of prejudice to HMRC, including because the appellant would seek to argue that assessment of trustees was out of time. The appellant therefore had no realistic prospect of adducing the new evidence or establishing an error of law in the FTT’s decision. Permission to appeal was refused.

• Upper Tribunal (Tax and Chancery Chamber): refused permission to appeal after oral reconsideration.
• First-tier Tribunal (Tax Chamber): dismissed the appellant’s appeal against the capital gains tax assessment and refused permission to appeal.
• The Upper Tribunal refused permission on paper on 29 August 2024 before reconsidering that decision orally.