Tribunal orders HMRC to disclose documents to taxpayers in offshore trust case

In Evans & Ors v HMRC [2025] UKFTT 1112 (TC), the First-tier Tribunal (FTT) allowed the taxpayers' disclosure application in part, ordering HMRC to provide most of the documents sought by the taxpayers, other than in relation to confidential correspondence between HMRC and foreign tax authorities.

Background

The underlying appeals challenged Capital Gains Tax (CGT) liabilities of approximately £15m, relating to tax planning arrangements involving offshore trusts and the application of double taxation conventions between the UK and New Zealand, and the UK and Mauritius.  
The specific decision in question was a case management decision concerning a disclosure application by the appellants seeking disclosure of specific documents from HMRC.

The appellants sought the requested documents on the basis that they were necessary for the appellants to establish the factual basis of claims, to assess whether estoppel applied (to prevent HMRC from denying their claims for relief) and to understand HMRC's historical position. 

FTT decision 

The application was granted, other than in relation to confidential correspondence between HMRC and the New Zealand and Mauritian tax authorities. 
With regard to those documents to be disclosed, the FTT directed HMRC to undertake a further search to locate any outstanding documents and to make disclosure by way of an amended List of Documents, commenting that it had doubts as to the overall integrity of the original exercise which HMRC had conducted. The FTT said that the appellants should be provided with the documents, even if HMRC did not intend to rely on them and/or regarded them as adverse to its case. 

The FTT did not consider the appellants request to be unfocussed or disproportionate and it did not amount to a 'fishing exercise', as had been argued by HMRC. In the view of the FTT, HMRC's original efforts had been inadequate. 

With regard to the confidential correspondence between HMRC and the New Zealand and Mauritian tax authorities, the FTT decided, on balance, that this correspondence should not be disclosed to the appellants. The FTT considered that it was not clear that this category of documentation would be relevant to the case and HMRC's concerns about publishing its confidential communications with other states concerning tax treaty negotiations, were legitimate. 

Comment 

In appeals before the FTT, the standard disclosure position is that a party only has to disclose documents they intend to rely upon. However, this decision illustrates that, in appropriate circumstances, the FTT will order HMRC to disclose relevant documents to appellant taxpayers, even where HMRC does not intend to rely on those documents and/or they are prejudicial to HMRC's case.

The issue of disclosure is topical at the moment, and another notable recent case is United Wholesale Grocers Ltd v HMRC [2025] UKFTT 1066 (TC), in which the FTT allowed the appellant's application for specific disclosure requiring HMRC to disclose documents concerning supply chains and related matters, mirroring the higher standard of disclosure provided for in the High Court under the Civil Procedure Rules.

The judge's comments in Evans on his use of AI in producing his decision are also worthy of note (see [42]-[49]). There can be little doubt that the use of AI by tax tribunal judges is likely to increase substantially as the technology develops.

The decision can be viewed here.