Judge rejects HMRC bid to see expat’s private court papers

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Crafty tax investigators are trying to unlock confidential divorce court documents to pursue a claim for unpaid tax against an expat husband who handed over a £48 million settlement in the UK’s most expensive marriage break up.

A legal challenge from HM Revenue & Customs to breach the confidentiality of proceedings in the High Court was thrown out by a judge.

HMRC launched the legal action in support of a claim for £11.5 million in unpaid tax against John Charman, who left the UK to live in Bermuda around six years ago.

HMRC says claims by Charman’s wife over his net worth relating to property and investments.

Following the claims and settlement, HMRC reassessed Mr Charman’s tax liability and presented him with the bill, which he disputes. HMRC want to use the court documents to prove their case, but Charman objects and the judge agreed with him.

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Mr Justice Coleridge said: There was “no suggestion that the husband is guilty of tax evasion or criminal conduct in relation to his tax affairs”

“For the purposes of the tax appeal and that hearing HMRC would like sight of and to be able to use transcripts of the divorce/financial proceedings and many other documents which were filed in or brought into being for the application/hearing in front of me.

“They have asked the husband and the wife to produce them. The wife is not objecting but the husband has refused to do so and so HMRC have issued this application for their production.”

The judge said that evidence produced in financial remedy proceedings are not disclosable to third parties except in exceptional circumstances and by leave of the court.

“Having considered and balanced the competing public interests here, I have no hesitation in finding that there is nothing rare or exceptional about this case which takes it outside the general rule,,” said the judge.

“The husband is entitled to say, with indignation, that he complied fully with the rules of disclosure and the confidentiality/privilege attached to the documents and other evidence produced thereby should not be breached.”

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