Ifoem Odina v The Commissioners for HMRC

The form of the hearing was by video conference call on Microsoft Teams.

With the consent of the parties, the form of the hearing was by video and attended by all participants remotely on the Teams video hearing system. The documents to which the Tribunal (“we/the tribunal”) were referred to were contained in a bundle of documents comprising of 283 pages and an Authorities Bundle of 878 pages.

Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely to observe the proceedings. As such, the hearing was held in public.

The amount of the assessment, which is the subject of the appeal, was issued by the Respondents (“the Respondents/HMRC”) to the Appellant, Ifeoma Odina (“the Appellant/IO”), is in respect of a Higher Income Child Benefit Charge (“HICBC”) of £6,304 in relation to the tax years 2019/20 to 2021/22 inclusive.

The appeal was submitted in time on 13 January 2025.

Section 8 of the Finance Act 2012 introduced the HICBC.

The HICBC arises under Section 681B of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).

Section 681B, inserted by the Finance Act 2012, section 8 and Schedule 1, para. 1, is given effect for the tax year 2012/13 and subsequent tax years but, in the case of 2012/13, only in respect of amounts of child benefit to which a person is entitled for weeks beginning on or after Monday, January 7, 2013.

Section 23 of the Income Tax Act 2007 sets out how to calculate a person’s adjusted net income for income tax liability purposes, and the starting position is defined as:

“To find the liability of a person (“the taxpayer”) to income tax for a tax year, take the following steps: -

Step 1

Identify the amounts of income on which the taxpayer is charged to income tax for the tax year.

The sum of those amounts is “total income.”

Each of those amounts is a “component” of total income.”

Step 2

Deduct from the components the amount of any relief under a provision listed in relation to the taxpayer in section 24 to which the taxpayer is entitled for the tax year.”

Section 8 of the Taxes Management Act 1970 (“TMA 1970”) sets out the requirements when a person is asked to provide information to establish the amounts to which a person is chargeable to income tax and capital gains tax:

Returns to include self-assessment are governed by section 9 of the TMA 1970 and Section 9A of the TMA 1970 governs enquiries into self-assessment tax returns and applicable time limits.

Discovery Assessments are governed by section 29 of the TMA 1970:

The ordinary time limit for making an assessment is set out at section 34 of the TMA 1970:

“34(1) Subject to the following provisions of this Act, and to any other provisions of the Taxes Acts allowing a longer period in any particular class of case, an assessment to income tax or capital gains tax may be made at any time not more than 4 years after the end of the year of assessment to which it relates”.

Section 50(6) of the TMA 1970 places the onus of proof upon the Appellant to demonstrate that they have been overcharged by the assessments.

Section 836 of the Income Tax Act 2007 governs income from jointly held property and says:

Section 837 of the Income Tax Act 2007 governs declarations of unequal beneficial interests.

Norman v Golder Inspector of Taxes) [1945] 1 ALL ER 352

Jerome Anderson v HMRC [2018] UKUT 0159 (TC)

IO and Diane Wilson on Officer of HMRC gave evidence.

The HICBC was introduced from 7 January 2013 and is an income tax charge on individuals who receive Child Benefit, or whose partner received Child Benefit, and whose “Adjusted Net Income” (ANI), or whose partner’s ANI, exceeded £50,000 (within a tax year). Where the recipient of Child Benefit and their partner both had ANI in excess of £50,000 in a tax year, the HICBC is charged on the partner with the higher ANI.

An income tax charge of 1% of the Child Benefit received by the household arises for every £100 by which the ANI of the person liable to the HICBC exceeded £50,000. Consequently, where that person’s ANI reached £60,000 in a tax year, the HICBC amounts to 100% of the Child Benefit received in their household.

When completing a self-assessment, a taxpayer must declare any entitlement to Child Benefit for the relevant tax year where liable to the HICBC.

On 05 February 2021, the Appellant was registered for self-assessment and on 24 February 2021, the Appellant’s 2019/20 self-assessment tax return was submitted online. The return declared income from employment totalling £43,128.00 and profit from UK land and property of £13,243.00. The Appellant did not declare any entitlement to child benefit on this return.

On 28 January 2022, the Appellant’s 2020/21 self-assessment tax return was submitted online. The return declared income from employment totalling £52,799.00 and profit from UK land and property of £17,412.00. The Appellant did not declare any entitlement to child benefit on this return.

On 21 January 2023, the Appellant’s 2021/22 self-assessment tax return was submitted online. The return declared income from employment totalling £60,065.00 and profit from UK land and property of £20,590.00. The Appellant did not declare any entitlement to child benefit on this return.

The Appellant had an ANI exceeding £50,000 and she received payments of Child Benefit for each tax year under appeal and apart from tax year 2019-20 the £50,000 limit was exceeded by the Appellant’s earned income regardless of the income from land and property.

The Appellant has been in receipt of Child Benefit effective from 31 January 2005 for her first child, 14 August 2006 for her second child and 10 December 2012 for her third child.

On 23 January 2024, Officer Diane Wilson discovered that the Appellant had not notified chargeability to the HICBC for the tax years 2019/20, 2020/21 and 2021/22 and that the Appellant’s self-assessment tax returns were, therefore, insufficient.

On 23 January 2024, the Respondents issued assessments based on the following amounts: 2019-20, an adjusted net income of £56,371, child benefit of £2,501 and a HICBC of £1,575; 2020-21, an adjusted net income of £67,412, child benefit of £2594 and a HICBC of £2,594; and 2021- 22, an adjusted net income £70,860, child benefit £2,135 and a HICBC of £2,135. The total amount of HICBC due was £6,304.

On 10 April 2024, the Appellant submitted an online request for removal from self-assessment, and, on 21 June 2024, the Respondents wrote to the Appellant and advised that they were unable to remove her from self-assessment as she was in receipt of income from property.

On 04 July 2024, the Appellant contacted the Respondents by phone and advised that she wished to appeal and to have her case placed on hold pending ongoing divorce proceedings with her ex-husband.

On 19 August 2024, the Appellant submitted a late appeal to the Respondents by email and, on 03 September 2024, the Respondents replied, providing their view of the matter upholding the assessments, and inviting the Appellant to request a statutory review or appeal to the Tribunal. A copy of the letter was sent to the Appellant’s, Agent, Paperchase Taxation (“Paperchase”).

On 12 September 2024, the Respondents received the Appellant’s letter dated 11 September 2024 accepting the offer of an independent review and on 09 January 2025, the Respondents sent their review conclusion letter to the Appellant upholding the assessments.

The Appellant gave evidence that she had not directly provided any the information to ‘her’ accountants, Paperchase, to complete her tax returns which included details of her employment income.

This information had been obtained from her by her former husband who had given it to Paperchase. She had not, therefore, given details of the Child Benefit she had received nor had she been asked to do so and at the relevant time was not aware of the obligation to return the amounts in her self-assessment tax return.

Paperchase had neither obtained approval of her completed tax returns nor sought her permission to submit them to HMRC before doing so.

The Appellant submitted and referred to the judgement, Odina v Onbogu, in the Family Court dated 9 May 2025 before Deputy District Judge Katherine Illsey (“the Family Court decision”).

This decision related to the financial settlement between the Appellant and her former husband, whose credibility the court decided was “in general undermined” and established that the Appellant’s former husband had used falsely low levels of income in his tax return and affected the Appellant’s income and tax liabilities detrimentally.

The Family Court decision confirmed that there were three properties in joint names and others held in the former husband’s sole name or by his company.

It recorded that the Appellant had “set out calculations of what she feels she should be entitled to by way of adding back to her half share of rental income". It also confirmed that the Appellant had joint mortgages on the properties with her former husband.

The Family Court confirmed that the Appellant did not receive the rental income attributed to her and the Appellant states that had this information been available to HMRC at the time then their decision would have been different.

The decision of the Family Court took into account, in reaching its decision on financial distribution and asset division, that the Appellant had become liable to tax. It, therefore, treated the £6,304 outstanding to HMRC for overpayment of child benefit as a “matrimonial debt” when reaching a settlement between the parties.

The Appellant does not dispute the co-ownership of three properties with her former husband but says that he received all the income from the properties and she received none.

Accordingly, she does not accept that the assessments are correct as they are based on the process of financial abuse and incorrect income reporting.

Officer Wilson gave evidence that she had conducted a check on the Appellant and her tax return and ascertained that HICBC charges were applicable as the threshold of £50,000 had been exceeded and in terms of the process the Appellant was the higher earner.

She considered that the Appellant had received payment of Child Benefit in the tax years under appeal when the ANI of the Appellant exceeded £50,000 in those years; the ANI of the Appellant’s partner was lower than the Appellant’s ANI; the Appellant had not included any entitlement to child benefit in her self- assessment tax returns for the tax years 2019/20 to 2021/22 (inclusive).

She made this decision on 23 January 2024 was based on the information available to her contained within the Appellant’s self-assessment tax returns and other HMRC records relating to the Appellant, including payments of Child Benefit.

Officer Wilson also confirmed that the Appellant had a liability to HICBC for the tax years 2020-21 and 2021-22 based on her employment income regardless of her rental income.

Officer Wilson made ‘section 29’ Revenue assessments for the three years which were notified on 23 January 2024, in the amounts of 2019-2020, £1575; 2020-2021, £2,594 and 2021-22, £2,135, and all of which were copied to Paperchase.

Whether the discovery assessments are correct, competent and in time and challengeable.

The burden of proof lies with the Respondents to show that the conditions for making the assessment were met. Once this has been shown, the onus reverts to the Appellant to provide evidence to either reduce or set aside the Respondents’ figures in respect of the tax years ending 5 April 2020 to 2022 (inclusive). Otherwise, the assessments issued under section 29 TMA 1970 stand good.

The standard of proof is the ordinary civil standard, on the balance of probabilities.

The Appellant did not actually receive any of the rental income referred to in her self-assessment tax returns for the tax years 2019/20, 2020/21 and 2021/22 as all rental income was paid to her former husband.

The Appellant was a victim of financial abuse perpetrated by her former husband who, together with his accountant, she says, fraudulently inflated the figures in her self- assessment tax returns. As a result, her returns do not reflect her real financial situation.

The Appellant provided HMRC with substantial evidence in the form of bank statements to show the absence of any rental income.

HMRC’s decision relies on the inaccurate and misleading entries that were improperly recorded and has resulted in an unfair assessment.

Whereas the Appellant concedes that she was unaware of the HICBC, until being advised about it by HMRC in 2024, and that some element of the HICBC would be due in relation to her employment income in the tax years 2020-21 and 2021-22, she does not believe she was “beneficially entitled” to the rental income which HMRC have taken into account in assessing her liability to the HICBC.

In doing so, the Appellant relies upon the judgement Odina v Onbogu in the Family Court on 09 May 2025, in a case between her and her former husband, which confirms, in view of the facts set out in the judgement, her former husband’s financial abuse, the fraudulent activity of the accountant, and that she did not receive any property rental income.

The Appellant accepts that there was no change to the statutory assumption that income from the jointly owned properties would be shared equally in the absence of a Form 17 but relies on the decision of the Family Court that she had no beneficial interest in the property, whilst accepting that legally on the title of the property she was an equal co-owner with her former husband.

The Appellant says the Family Court decision displaces the statutory provision at section 826 of the Income Tax Act 2007 that she was beneficially entitled to the income in equal shares as she had no ‘beneficial interest’.

The Appellant wishes the tribunal to consider the terms of her proposal of settlement dated 5 July 2025 to confirm that no HICBC is due for the year 2019 20, £700 is due for the year 2020-21 and £2,135 is due for the year 2021-2022, making a total of £2,835.

In addition, the Appellant wishes the tribunal to accept her evidence and recognise the financial abuse she experienced and the Family Court’s findings regarding malicious entries made by her former husband. This acceptance should lead to a re-evaluation of her assessments based on accurate figures reflecting her true financial situation.

The Appellant requests the cancellation of the tax liability as there have been inaccuracies in her self-assessment returns, particularly regarding the entries relating to rental income.

The Respondents say that Officer Wilson, having ascertained the circumstances on 23 January 2024 was able to decide that liability to the HICBC arose;, decide which person in the household was liable; quantify the liability; and verify that the Appellant’s assessment tax was insufficient to account for the HICB.

The Appellant made and delivered a self-assessment tax return under section 8 TMA 1970 in respect of the relevant years. The Respondents to make an assessment required that the condition at section 29(2) TMA 1970 and (at least) one of the two the conditions at section 29(3) TMA 1970 conditions were met.

The Respondents contend in relation to section 29(2) that there is no evidence to show that the underassessment to tax is attributable to generally prevailing practice at the time the return was made.

The Respondents further submit that the section 29(3) TMA 1970 condition (“the officer condition”) is satisfied because at the time when an officer of the Board ceased to be entitled to give notice of his intention to enquire into the Appellant’s returns (24 February 2022 for the tax year 2019/20, 28 January 2023 for the tax year 2020/21 and 21 January 2024 for the tax year 2021/22):

The only information “made available” to an officer of the Board by 24 February 2022, 28 January 2023, and 21 January 2024, was the information contained within the 2019/20, 2020/21 and 2021/22 self-assessment returns filed on behalf of the Appellant. These returns did not include any entitlement to child benefit for the relevant years.

In the case of Jerome Anderson v HMRC, the Upper Tribunal sets out two tests which must be met for the relevant conditions of section 29(1) TMA 1970 to be satisfied: a subjective test and an objective test.

They set out the subjective test in the following terms (at [28]:

“…Having reviewed the authorities, we consider that it is helpful to elaborate the test as to the required subjective element for a discovery assessment as follows:

“The officer must believe that the information available to him points in the direction of there being an insufficiency of tax.”

That formulation, in our judgment, acknowledges both that the discovery must be something more than suspicion of an insufficiency of tax and that it need not go so far as a conclusion that an insufficiency of tax is more probable than not.”

At [30], the Upper Tribunal sets out the objective test:

“The officer’s decision to make a discovery assessment is an administrative decision. We consider that the objective controls on the decision making of the officer should be expressed by reference to public law concepts. Accordingly, as regards the requirement for the action to be “reasonable,” this should be expressed as a requirement that the officer’s belief is one which a reasonable officer could form. It is not for a tribunal hearing an appeal in relation to a discovery assessment to form its own belief on the information available to the officer and then to conclude, if it forms a different belief, that the officer’s belief was not reasonable.” (Emphasis added.)

In summary therefore, the two questions to be asked are: (a) did the Officer believe that there was an insufficiency? and (b) was that belief one which a reasonable Officer could form? The Respondents contend in this appeal that both questions are unquestionably satisfied.

The Officer had, therefore, within the meaning of section 29(1)(b) TMA 1970 discovered that an assessment to tax, in this case the Appellant’s self-assessment, was insufficient on 23 January 2024.

The Respondents rely on the ordinary time limit at section 34 TMA 1970, which provides that an assessment on a person in a case involving a loss of income tax or capital gains tax may be made at any time not more than 4 years after the end of the year of assessment to which it relates. All assessments under appeal have been raised within this time limit.

Section 50(6) TMA 1970 provides that, where an Appellant is overcharged by an assessment, the Tribunal is empowered to reduce it.

The onus is on the Appellant to show that they have been overcharged by the assessment, otherwise the assessment shall stand. In Norman v Golder, Lord Greene MR stated:

The Appellant has states that the Assessments are based on inflated income figures as a result of rental income being declared on her self-assessment tax returns that she did not receive.

The Respondents submit that the method by which the assessments are calculated is set out in statute and that the assessments have been correctly calculated in line with statute.

For calculating liability to the HICBC, in line with section 23 of the Income Tax Act 2007, the Respondents have calculated the Appellant’s ANI on the information submitted on the Appellant’s own self-assessment tax returns.

The Appellant disputes the ANI figures and states that the rental income has been incorrectly included within her self-assessment tax returns on the basis that the funds were paid to her former husband, and as a result she did not personally receive the income, despite jointly owning the three rental properties.

The Appellant adds that she was unaware that rental income had been included within her self-assessment tax returns as these had been submitted without her knowledge as she has been the victim of financial abuse by her former husband and by the fraudulent activity of her accountant.

Whilst the Respondents sympathise with the Appellant’s personal circumstances, they submit that the rental income has been correctly declared in line with the statute.

The Respondents submit that under section 836 of the Income Tax Act 2007, the Appellant is to be treated for income tax purposes as a beneficiary entitled to the income in equal shares, regardless of the “actual” recipient of the rental income.

Section 837 Income Taxes Act 2007 outlines the requirements regarding declarations of unequal beneficial interests for jointly held properties. The requirements under this section are as follows:

In accordance with the legislation, it is not sufficient that the beneficial interest in the property equates to unequal shares, a separate declaration must be made ‘in such form and manner as the Commissioners of Her Majesty’s Revenue and Customs may prescribe’, and within the period of 60 days beginning with the date of the declaration.

The Respondents require the submission of a Form 17 if a taxpayer wants to change the split of income to their actual shares of ownership. This means that if a married couple or civil partners are both “beneficially” entitled to income from property, they can formally declare that one has a greater share than the other. The declaration should also reflect the split shown in the trust deed.

The Respondents are not in receipt of a valid Form 17 for the tax years in question. Therefore, the Respondents contend that no valid declaration under Section 837 has been made, and beneficial ownership cannot be taken to have passed to the Appellant’s former husband for the tax years in question.

The Appellant is, therefore, legally recognised as beneficially entitled to the income from the jointly held properties in equal shares.

HMRC’s system records show that the Appellant acknowledged in her call to them on 11 September 2024, that she was aware that she was registered for self- assessment and that she was told by her agent that she had to do so because she had property income.

The Respondents also submit that the information relating to PAYE income had been submitted correctly and on the balance of probability, the Appellant would have had involvement in submitting the returns.

The Respondents submit that the income figures relied upon to calculate the Appellant’s ANI is, therefore, correct.

Similarly, none of the other reasons suggested by the Appellant can displace the assessments. No additional information has been provided by the Appellant to demonstrate that the assessments are incorrect, and therefore the Respondents submit that in all cases the assessments shall stand good.

The Respondents further contend that none of the Appellant’s contentions, including all the communications throughout the compliance and appeals processes, are relevant circumstances which would warrant a reduction of the assessments.

The Respondents contend that the assessments were correctly made and were also charged in the correct amounts.

The Respondents contend:

In light of the above submissions, the Respondents request that the Tribunal confirm that the discovery assessments have been correctly made and dismiss the appeal.

The tribunal accepted the difficult circumstances that the appellant found herself in including her tax return being submitted without her personally providing any information.

The Appellant had not directly given information to Paperchase nor had should be consulted by them about the submission of her tax returns.

There was clear evidence from the Family Court decision of financial abuse by her former husband who had supplied the information to paperchase in relation to the Appellant’s tax return and had kept all the income from the equally owned properties.

We considered the settlement made by the Appellant to HMRC on 05 July 2025 but were unable to accept this.

The function of the tribunal is to apply the facts and evidence to the law.

The law states clearly at section 836 Income Tax Act 2007 in relation to joint property that where property is held in the joint names of individuals who are married and live together then those individuals are treated for income tax purposes as being beneficially entitled to the income from those properties in equal shares.

There was no evidence or contention that the Appellant and her former husband were not living together at the relevant times.

The exception to being treated as beneficially entitled to income in equal shares is if an election has been made under section 837 of the Income Tax Act 2007, set out in the Respondents’ contentions and requires the affected taxpayers to complete a Form 17 and submit it within 60 days of the decision to receive income unequally.

The Appellant confirmed that she jointly owned three properties with her former husband, and this was confirmed in the Family Court decision. Consequently, the conditions in section 836 of the Income Tax Act 2007 apply and for tax purposes the Appellant was “beneficially entitled” to receive an equal share of the rental income and pay tax on it.

It is not relevant for the purposes of reporting and paying income tax whether the actual income was not received by such co-owners in equal shares. To this extent, therefore, the expression “entitlement” indicating receipt has a different meaning to the term in the statute of “beneficial entitlement”

We were unable to confirm any reference in the Family Court decision that stated the Appellant was not beneficially entitled to co-ownership of the 3 properties, producing the property income which resulted or contributed to the HICBC, and did not accept that it overrode the provisions of section 836 Income Tax Act 2007 nor that the treatment of income was overridden, even in the absence of submission of a Form 17.

Furthermore, the Family Court decision took into account the calculations set out by the Appellant of what she felt she should be entitled to by adding back her half share of rental income, which she had not received. In reaching the financial settlement between the parties, the Family Court also took into account the HICBC of £6304 as a ‘matrimonial debt’.

We considered, accordingly, that as the Appellant co-owned the three properties, she was, in the absence of an election recorded in the form set out by HMRC to the contrary, beneficially entitled to 50% of the income of those properties and due to pay tax upon it with the consequence also that her ANI was exceeded in the tax years under appeal. As no child benefit had been declared on her self-assessment tax returns but had been received, HICBC was due.

In considering the HICBC charge and Discovery Assessment process we agreed with the Respondents’ Contentions, set out in some detail, including compliance with the assessing procedure set out at section 29 TMA 1970, the conditions of section 23 TMA 1970 , in relation to the process for calculation, and the conditions of section 34 TMA 1970, in relation to the applicable time limits.

We find (1) that the ANI and Child Benefit figures used to calculate the HICBC are correct and that the Discovery Assessments have been correctly calculated and were made within the statutory time limit and (2) there is insufficient evidence to either reduce or set aside the Respondents’ figures in respect of the tax years ending 5 April 2020 to 2022 (inclusive). The Discovery Assessments issued under section 29 TMA 1970 stand good.

For these reasons, the appeal is dismissed.

This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to "Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)" which accompanies and forms part of this decision notice.