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HMRC is consulting on proposals that would, for the first time, require individuals and trusts to notify HMRC when they adopt an uncertain tax treatment (“UTT”) that confers a tax advantage.

Individuals and trusts brought fully within scope

All individuals and all trusts will fall within the UTT regime, without any turnover, balance sheet or “wealth” threshold albeit a notification would only be required where the tax advantage exceeds £5 million.

The current proposals will extend the UTT regime beyond income tax to also include:

• Capital Gains Tax
• Inheritance Tax
• Stamp Duty Land Tax (England and Northern Ireland only)
• All classes of National Insurance contributions
• Construction Industry Scheme deductions (where relevant)

This increases the likelihood that complex transactions such as asset restructurings, trust appointments, property transactions or succession planning could fall within scope.

Current rules

Since April 2022, the UTT regime has required certain large companies and partnerships to notify HMRC when they have adopted a UTT in relation to Corporation Tax, VAT or Income Tax (including PAYE).

Under the current UTT regime, an uncertain treatment is defined by two triggers and notification is required where: (i) one or both of the statutory triggers are met, (ii) the tax advantage exceeds £5 million and (iii) no exemption applies.

The existing statutory triggers are:

• the taxpayer’s interpretation of the law is contrary to HMRC’s known position, as set out in published guidance or in correspondence with HMRC; or
• the taxpayer has recognised a provision in its accounts to reflect the likelihood that a different tax treatment will ultimately apply.

New “unknown HMRC view” trigger

In addition to the existing triggers, HMRC proposes a new notification trigger  where:

• there is more than one credible legal interpretation, and
• HMRC has not published or otherwise communicated its view.

This is particularly relevant for individuals and trusts, where planning often relies on areas of law that are technically uncertain but not directly addressed in HMRC guidance. Where a trust holds assets through a company or partnership, the notification obligation would arise only if the trust itself adopts an uncertain legal interpretation. This may be difficult to apply in practice, particularly for employee benefit trusts and other sponsored arrangements.

Tighter exemption

Currently, no notification is required if it is reasonable to conclude that HMRC already has all relevant information. HMRC proposes to tighten this exemption so that individuals and trustees would need explicit confirmation from HMRC that it is aware of the uncertainty.

This change would significantly reduce reliance on informal disclosures made through correspondence, returns or enquiries, and may encourage earlier and more formal engagement with HMRC. It may be wise to engage proactively with HMRC where uncertainty arises, with a view to obtaining the confirmation needed.

Next Steps

Although the £5 million threshold limits the scope, the proposals would require individuals and trustees to:

• identify and document legal uncertainty more formally;
• assess competing interpretations against HMRC guidance (or the absence of it); and
• track potential tax advantages across multiple taxes.

HMRC acknowledges that this will increase compliance obligations, even where HMRC ultimately agrees with the taxpayer’s position.

The present consultation closes on 4 June 2026, with HMRC’s response expected later in the summer. Those likely to be affected may wish to consider responding to the consultation, particularly on the practical and administrative challenges. Any legislation would be introduced in the next Finance Bill and would apply to returns filed from 1 April in the following tax year.

¹ Linked to the Sept 2025 Guideline for Compliance GfC13

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Shortly before a 4-week trial was due to commence, HMRC conceded that the appeal of Ducas Ltd (part of the Maxipay group) should be allowed in full and the associated Freezing Orders discharged. HMRC are also to pay Ducas’ costs on the indemnity basis. There will also be an enquiry as to damages caused by the Freezing Orders.

The background to the appeal was that, in November 2024, HMRC issued Ducas with a £171m assessment under the agency legislation - the NICs equivalent of s. 44 ITEPA 2003. HMRC also obtained Freezing Orders against Ducas and other Maxipay companies on an ex parte (without notice) basis.  HMRC also later brought proceedings against the Maxipay UBO and secured a Freezing Order on an ex parte basis - that claim has also been discontinued and the Freezing Order discharged.

Since November 2024, there have been numerous hearings in the High Court and the FTT in which we secured:

- the listing of a speedy trial;

- the continuation of a cross undertaking in damages on the Freezing Orders (which will now form the basis of the enquiry as to damages);

- a very favourable High Court costs decision after various interlocutory hearings in which the Judge praised the companies’ ‘mature’ and ‘sensible’ approach to the Freezing Orders  (HMRC v Ducas Ltd and Others [2025] EWHC 226 (Ch) [2025] Costs L.R. 1095); and

- heightened disclosure from HMRC.

The team also successfully resisted an appeal by HMRC to the Upper Tribunal in relation to disclosure which resulted in HMRC being ordered to pay Ducas’ costs of that appeal (HMRC v Ducas Ltd [2025] UKUT 362 (TCC) [2025] S.T.C. 1843): https://assets.publishing.service.gov.uk/media/6903308692779f89baa51fc2/HMRC_v_Ducas_Ltd_-_Final_Decision_.pdf

Iain MacWhannell instructed David Bedenham KC and Chris Stone KC of Devereux Chambers.

Iain, David, and Chris were greatly assisted by the wider JHAB team which included Thomas Hemming, Julia Glukhikh, Jono Gould, Tessa Hocking, John Hayton, Charlotte Agnew-Harington and Seth Cumming.

In September 2025, HMRC published “Guidelines for Compliance - GfC13” relevant to taxpayers who are:

• Uncertain of the correct interpretation of the law after making their best efforts to resolve the ambiguity.

• Considering / adopting a novel or improbable interpretation of the law, including after taking professional advice

The guidelines highlight the legal obligation of the taxpayer to provide a tax submission document that is correct (in both fact and law) and complete to the best of their knowledge. In adopting a filing position, HMRC make it clear that:

• A taxpayer has an obligation to make best efforts to resolve uncertainty on how the law should be applied before making tax filings.

• When seeking professional advice, this must be from a suitably qualified advisor.  

• Where more than one interpretation of the law might be applied, the taxpayer must choose the interpretation that they believe is, on balance, most likely correct.

• The taxpayer is encouraged to disclose any novel interpretation / uncertainty to HMRC.

One to many postal campaign

Since the publication of the new guidelines, HMRC have written to wealthy taxpayers, asking them to review this guidance and complete an anonymous survey to collate feedback.

Implications for taxpayers

The issued guidelines do not represent a change in the law but HMRC will no doubt refer to them when making an assessment of taxpayer behaviour in relation to penalties. Careful reference to the guidelines should help the taxpayer (in a self-assessment system) reduce the risks of compliance checks and unexpected tax liabilities.

The publication of these guidelines forms a significant part of HMRC’s broader efforts to enhance compliance standards targeted at both taxpayers and also advisers who from May 2026 will be subject to mandatory government registration.

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