Afzal Alimahomed v The Commissioners for HMRC

For the purposes of Income Tax Act 2007, s809L, “money” includes bank money represented by a credit balance, notwithstanding the strict legal analysis of bank transfers as debits and credits involving separate choses in action. A taxpayer brings money to the United Kingdom when the taxpayer arranges a bank transfer to a UK account; physical accompaniment is unnecessary. The “brought by” limb of Condition A contains no additional requirement that the money benefit or be enjoyed by a relevant person. However, credit-card transactions cannot be treated as remittances merely because an offshore card was used. The tribunal must identify the Condition A property, determine whether it was brought to the United Kingdom, and then establish whether the resulting debt was a relevant debt. Those issues may require fact-sensitive analysis.

The appellant, a UK-resident non-domiciled individual claiming the remittance basis for 2016/17, appealed against a closure notice assessing £133,681.90. The First-tier Tribunal dismissed the appeal, holding that transfers from the appellant’s offshore account to UK accounts of non-relevant persons were remittances, and that offshore credit-card payments for goods, services and jewellery created relevant debts paid with untaxed foreign income or gains.

The appeal concerned whether the FTT had erred in its interpretation and application of s809L of Income Tax Act 2007 to bank transfers and credit-card transactions.

1. Bank transfers. Ground One was dismissed and the FTT’s decision was upheld in relation to transfers from the appellant’s offshore account to UK accounts of non-relevant persons. The statutory reference to “money” in Condition A includes bank money. It is unnecessary to analyse the transaction solely by identifying the chose in action against the paying bank. The strict analysis described in Foskett v McKeown [2001] 1 AC 102 and R v Preddy [1996] AC 815 does not prevent the statutory language from treating bank money as property brought to the UK.
2. The word “brought” does not require the taxpayer to accompany the property. A bank transfer arranged by a relevant person can constitute money being brought to the UK. Section 809V supports that construction because it contemplates direct payments to HMRC as money brought to the UK. The court also relied on the ordinary-language reasoning in Court Enforcement Services Ltd v Marston Legal Services [2020] EWCA Civ 588 and Thomson v Moyse [1961] AC 967.
3. Condition A does not require additional benefit or enjoyment by a relevant person where money is brought to the UK by a relevant person. The FTT therefore made no material error of law in treating the bank transfers as remittances.
4. Credit-card payments. Grounds Two and Three were allowed. The FTT had failed to identify the relevant Condition A property or establish that it was brought to the UK. Without that analysis, it could not determine whether the appellant’s debt to the offshore credit-card company was a relevant debt under s809L(7), or whether Condition B was satisfied. The FTT’s assumption that use of the card was equivalent to authorising payment into the UK was not adequately supported by its findings.
5. The Upper Tribunal declined to remake the decision. The credit-card issues were fact-sensitive, and the necessary evidence and findings had not been developed. The relevant parts of the FTT decision were set aside and remitted for rehearing, with directions for amended pleadings, disclosure, witness statements and skeleton arguments.

• Upper Tribunal (Tax and Chancery Chamber) [2025] UKUT 428 (TCC): Ground One dismissed and the FTT decision upheld for the bank transfers. Grounds Two and Three allowed; the decision set aside for the credit-card payments and that part of the appeal remitted to the FTT.
• First-tier Tribunal (Tax Chamber) [2024] UKFTT 00432 (TC): appeal against the closure notice dismissed.