Under Section 11 of the Tribunals, Courts and Enforcement Act 2007, an appeal to the Upper Tribunal (UT) against a decision of the First-tier Tribunal (FTT) can only be made on a point of law. This was illustrated by a recent decision in which the UT refused a taxpayer permission to appeal against a decision relating to the market value of shares.
The taxpayer had donated 190,000 shares to charity and had claimed tax relief of £80,750 on the basis that they were worth 42.5p each. After enquiring into his self-assessment return for the relevant year, HM Revenue and Customs (HMRC) concluded that the shares were worth 9.44p each and accordingly issued a closure notice reducing the relief claimed to £17,936.
The taxpayer accepted HMRC's offer of a statutory review, which upheld the closure notice. He then appealed to the FTT, which preferred the valuation contended for by HMRC and dismissed the appeal.
He applied to the UT for permission to appeal on the grounds that HMRC's expert report had failed to consider important facts and examine supporting documentation in determining its valuation, and the FTT had therefore erred in relying on it. He claimed that the report had been wrong to dismiss transactions valuing the shares at 37p as not being at arm's length.
The UT noted that his argument was, in essence, that the FTT ought to have arrived at a different valuation on the evidence before it. The valuation of the shares was a matter of fact, and a finding of fact can only amount to an error of law where it has been made without any evidence, or where the evidence or the only reasonable conclusion contradict the finding.
The UT concluded that it had been at least open to HMRC's expert, and therefore the FTT, to reject the 37p valuation. An argument that the expert had wrongly taken account of information that would not have been available to a prudent purchaser in the taxpayer's circumstances was rejected. The expert and the FTT had clearly been alive to this issue, and the taxpayer had not identified how the valuation accepted by the FTT had relied on information that only became available after the valuation date.
The taxpayer had not demonstrated that a valuation of 37p per share was the only conclusion the FTT could have drawn from the evidence. Refusing permission to appeal, the UT was not satisfied that the grounds of appeal disclosed any arguable error of law in the FTT's decision.