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	United Kingdom Special Commissioners of Income Tax Decisions
You are here: BAILII >> Databases >> United Kingdom Special Commissioners of Income Tax Decisions >> Rose v The Director of the Assets Recovery Agency [2007] UKSPC SPC00620 (20 July 2007) URL: http://www.bailii.org/uk/cases/UKSPC/2007/SPC00620.html Cite as: [2007] UKSPC SPC00620, [2007] UKSPC SPC620

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Spc00620

PROCEEDS OF CRIME ACT – undeclared profits of ironing trade – amount taxable

THE SPECIAL COMMISSIONERS

JOHN GEORGE ROSE Appellant

- and -

THE DIRECTOR OF THE ASSETS RECOVERY AGENCY Respondents

Special Commissioner: ADRIAN SHIPWRIGHT

Sitting in public in London on 1 June 2007

Richard Wormold, Counsel, for the Appellant

Richard Smith, Legal Section, Assets Recovery Agency, for the Respondents

© CROWN COPYRIGHT 2007


 


DECISION

Introduction

1. Mann J directed in the appeal of this matter to the Chancery Division of the High Court, by consent and upon the parties having agreed that were undeclared profits from an ironing trade, that:

(1) the appeal be allowed to the extent that there are undeclared profits from an ironing trade; and

(2) the appeal be remitted to the Special Commissioner solely to determine the quantum of the undeclared profits and to adjust the assessments accordingly.

2. Consequently, this hearing was concerned solely with the quantum of undeclared profits.
3. The parties agreed that there were two issues for me to determine and requested that I make a decision in principle on these issues so that they could seek to agree the figures. I agreed to this. Consequently, this is a decision in principle for the parties to seek to agree the figures. The parties are to have liberty to apply if they are unable to agree the figures.
4. It was agreed that the onus of proof was on the Appellant to show that the Respondents' determination and figures were wrong. A schedule setting out the Respondents' calculations was attached to a draft Order produced by the Respondents. It was by reference to these figures that discussions between the parties had taken place. I was told that two questions needed to be answered so that these figures can be finalised.
5. A further helpful witness statement was provided for Jane Richards which was accepted in evidence and she was cross-examined. Mr Rose gave oral evidence and was cross examined. There was no witness statement for Mr Rose.
6. The two issues were:

(1) What was the value of the drugs and whether such value should be included for each of the years in question; and

(2) Whether the four cheques represented the proceeds of a one-off sale of jewellery by his wife as the Appellant claimed or were the proceeds of part of a systematic dealing in jewellery such that an equivalent amount should be included for each of the years in question.

7. The parties agreed that the wholesale value of the drugs was about £4,300 and the street value £11,500.
8. I had found that the cache of drugs belonged to the Appellant and that he was not carrying on a trade of dealing in drugs. The Appellant had also told me that he "had a drug habit". This finding was not challenged but I should record that in his evidence Mr Rose continued to deny that the drugs were his.
9. I find that the drugs should be included at their street value of £11,500 as they were Mr Rose's for his use to feed his drug habit. I also find that such amounts should be included in the calculations for each of those in question.
10. There were four cheques in issue totalling some £5,600. They were:

(1) Cheque dated 15 June 2000 £1,600

(2) Cheque dated 21 March 2001 £1,500

(3) Cheque dated 2 April 2001 £ 750

(4) Cheque dated 25 August 2001 £1,750

TOTAL £5,600

11. Mr Rose gave evidence that these were all payments from Mr Wood. Mr Wood was a family friend who had purchased a diamond ring and some other jewellery from Mrs Rose, the Appellant's wife. Because of the sum involved the price was paid in four instalments. The cheques were paid into Mr Rose's bank account as his wife did not have a separate bank account at the time. Mrs Rose had inherited the items from her grandmother who had died fifteen or so years ago. Mrs Rose was not particularly attached to them but had retained them for some time. They did have sentimental value. She had asked her mother about it before selling. The reason for sale was that Mr and Mrs Rose did not wish to have high value jewellery on the premises.
12. Despite the Respondents' valiant attempts to discredit Mr Rose's credibility I accept his evidence on this. I find that these four cheques related to sale of personal jewellery and were not part of the proceeds of a trade of dealing in jewellery. There was nothing to show that they were part of an ironing trade.
13. I therefore answer the questions:

(1) The value of the drugs is their street value of £11,500 and such value should be included for each of the years in question; and

(2) The four cheques represented the proceeds of a one-off sale of jewellery by his wife as the Appellant claimed and were not the proceeds of part of a systematic dealing in jewellery. Consequently, an equivalent amount should not be included for each of the years in question.

14. In the light of my findings, I leave it to the parties to seek to agree the figures. The parties are to have liberty to apply if they are unable to agree the figures.

SPECIAL COMMISSIONER

RELEASE DATE: 20 July 2007

SC/3154/2004