Racy tale of lavish gifts ends with large tax billby
Advisor claimed valuable gifts from Ecclestone business and family weren’t taxable, but his story finds no traction and crashes into the barrier of truth.
Stephen J Mullens’ (TC08112) attempted to persuade HMRC and the first-tier tribunal (FTT) that huge payments he received from racing impresario Bernie Ecclestone’s businesses, as well as from Ecclestone’s ex-wife and trusts, inextricably involved in Ecclestone’s business dealings, were gifts which had nothing to do with business. He claimed these lavish “gifts” arose solely out of personal affection that had arisen over the course of a 25 year business relationship with the Ecclestone organisation.
Front of the grid
This case began with a false start when Mullens, who is a solicitor, failed to record on his tax returns a series of payments coming overall to just under £40 million according to the schedule HMRC provided to the FTT:
(1) 1999/2000 £1.2 or 1.25m (recorded but incorrectly)
(2) 2001/2002 £750,000
(3) 2006/2007 £300,000
(4) 2006/2007 £21,846,200 ($38m)
(5) 2008/2009 £10,015,005
(6) 2012/13 £5m
(7) 2008/2009 £187,271 ('Holiday Payment')
Payments 1, 2 and 3 were made following Mullens’ involvement in a deal made by an Ecclestone company (Bambino Holdings Ltd. – BHL), allegedly to induce him to resign his position as the main partner in law firm Marriott Harrison to devote his time exclusively to the Ecclestone family interests.
Payments 4, 5 and 6 and the holiday payment were made by or at the instigation of Bernie Ecclestone’s ex-wife Slavica.
Mullens contended that he did not need to return any of the payments because none was taxable. The explanations put forward by Mullens’ barristers were many and various, and contained a level of swerves, baulking and obstruction that would have seen any racing driver disqualified in an instant.
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Chris Williams is a tax author, AccountingWeb contributor, co-editor with Satwaki Chanda of Bloomsbury's CGT reliefs for SMEs and contributor to Claritax Books. Main interests are Rugby (either code), motorbikes (volunteer bloodbiker) and crosswords. Lifetime ambitions: lead Wales to World Cup glory (hope fading); win IoM Senior TT (hopeless);...