The First-tier Tribunal has drawn a hard line through a common owner-manager pattern: legal title sits with one person, beneficial ownership with another, the asset is sold, and the economic owner hopes the CGT file stays quiet. In Jessbir Kaur v HMRC [2026] UKFTT 1277 (TC), the tribunal held that Mrs Kaur was absolutely entitled as against her son as trustee under section 60 TCGA 1992, so his July 2020 disposal of a London residential property was treated as hers. The discovery assessment stood. Quantum was the only real win — actual proceeds, not a higher “envisaged” figure, and allowable expenditure on establishing, preserving or defending title under section 38(1)(b) TCGA.
Claritax’s case note lands the same point: beneficial ownership and absolute entitlement were not split apart as the taxpayer hoped.
What actually happened
Mrs Kaur bought the property around March 1991. Legal title later moved through her husband (2000), her daughter (2006) and her son, GSP (2008). At disposal on 30 July 2020, GSP was the registered proprietor and completed the sale. By County Court order dated 14 March 2023 the court declared that GSP had held legal title on trust for her absolutely; that he held the net sale proceeds on the same basis; that a replacement property bought with those proceeds was held on trust for her; and that about £3,000 of unspent cash remained on trust for her.
HMRC required self-assessment returns. On 18 January 2024 she filed nil returns for 2019/20 to 2021/22 — white space blank, no disclosure of the disposal. HMRC did not open an enquiry into her 2020/21 return. Separately, while looking at GSP’s affairs, Officer Evans saw the County Court order, concluded that section 60 made her the disponor, and on 19 March 2025 issued a discovery assessment for £58,874.52 of CGT under the Taxes Management Act 1970.
Absolute entitlement is not a separate “control” test
Section 60(1) TCGA applies the Act as if property held by a trustee for a person absolutely entitled as against the trustee were vested in that person, and as if the trustee’s acts were that person’s acts. Section 60(2) defines absolute entitlement as the exclusive right, subject only to trustee rights of resort for duty, taxes, costs or outgoings, to direct how the asset is dealt with.
Mrs Kaur accepted beneficial ownership of the property, proceeds and replacement asset. She still argued that absolute entitlement required an immediate right to call for transfer at disposal — and that GSP’s practical control, plus later remedial litigation, meant she was not the person who “made” the disposal for CGT.
The FTT refused that split. Sole beneficial ownership from 1991 through disposal, with her interest traced into proceeds and the replacement property, carried the legal consequence that immediately before disposal she was absolutely entitled as against GSP. That matches HMRC’s bare-trust architecture in CG34300, CG34320 and CG37000: nominee legal title is disregarded; gains are computed as if the beneficiary owned the asset.
“Legal owner sold it” is not a CGT answer once the file shows bare trust / absolute entitlement. Family nominee titles, side letters and unregistered beneficial interests all sit inside this analysis — as do PE diligence packs that stop at Companies House or HM Land Registry title without a beneficial-ownership map.
Discovery survived because the return said nothing
Once a return has been filed, section 29 TMA 1970 needs a further gateway. HMRC ran section 29(5): at the end of the enquiry window (18 January 2025 for the 2020/21 return), an officer could not reasonably have been expected, on information then available, to be aware of the insufficiency.
The only section 29(6) information from the taxpayer was the return itself. It disclosed no disposal. The County Court order came from GSP’s side of HMRC’s work, not from Mrs Kaur. Discovery was valid. The tribunal did not need to decide carelessness under section 29(4) / section 118(5) TMA, and declined to do so while HMRC remained in time for a possible Schedule 24 FA 2008 penalty.
A blank white space after a County Court declaration of absolute beneficial ownership is not protective silence. HMRC’s Enquiry Manual EM1500 still turns on what was made available — not on what the taxpayer privately knew.
Quantum: actual proceeds and title-defence costs
The assessment used a higher “envisaged” disposal value rather than actual proceeds to an unconnected buyer. That failed. More important for every contested beneficial-ownership file: section 38(1)(b) allows deduction of expenditure wholly and exclusively incurred in establishing, preserving or defending title. HMRC’s computational framing sits in the Capital Gains Manual CG15150+ series.
HMRC said post-disposal litigation costs were too late. The FTT disagreed: unlike enhancement expenditure, title-defence spend has no equivalent pre-disposal lock in the statute. Costs up to the County Court order could qualify if evidenced.
What every CFO must lock now
1. Beneficial-ownership register, not title screenshots. For every material property, shareholding or IP right held by a nominee, spouse, SPV director or family member, record who is absolutely entitled, from when, on what evidence, and whether section 60 makes trustee acts the beneficiary’s acts. Align that register with PSC filings, trust deeds and side letters. CG34300 is the baseline.
2. Disposal-year white space that actually discloses. If beneficial ownership is contested, litigated or only clarified after sale, put the fact pattern, court order and section 60 analysis in the self-assessment white space — not a nil return with a blank box. Where UK residential land is in play, also diary the GOV.UK CGT on property reporting clocks.
3. Related-party enquiry contagion. Kaur’s assessment crystallised because an officer working GSP’s file saw the County Court order. Group tax risk maps should assume HMRC will join the dots across family members, ex-directors and connected companies. One person’s litigation exhibit is another person’s discovery packet.
4. SPA and warranty language on beneficial ownership. Price absolute entitlement and historic nominee arrangements into tax covenants and disclosure letters. A clean Land Registry title is not a clean CGT history if bare trusts sat underneath for years. For PE exits, treat nominee/family title as a diligence workstream with documents, not a management representation.
5. Title-defence cost ledgers and open years. Code costs that establish or defend title separately from general dispute spend. After any late beneficial-ownership clarification, diary discovery windows, possible Schedule 24 penalties, and whether an unprompted disclosure is safer than waiting for the next related-party enquiry letter. If sale proceeds buy another asset still held by the nominee, the section 60 analysis travels with the trace — including any later principal private residence analysis on the replacement.
The CFO bottom line
Kaur does not invent a new CGT charge on nominees. It confirms, on agreed beneficial ownership and a blank return, that absolute entitlement under section 60 makes the trustee’s disposal the beneficiary’s disposal; that discovery can be founded on material HMRC obtains elsewhere when the return discloses nothing; and that quantum still turns on actual proceeds and evidenced title-defence spend under section 38(1)(b).
Treat every material asset held off the economic owner’s legal title as a section 60 workstream until the file proves otherwise. Board paper: legal owner, beneficial owner, absolute entitlement evidence, disposal reporting, white-space disclosure, related-party HMRC touchpoints, and a cost ledger for title defence. Align that pack with HMRC’s self assessment helpsheets and group tax risk registers. That file survives the next discovery letter — not a hope that “it was in his name” finishes the tax job.
General commentary for finance leaders, not advice on any specific transaction or dispute. CGT and discovery outcomes turn on facts, timing and the statutory text in force for the year.