The FTT handed down its judgment in Cogefin (Bermuda) Ltd & Ciardi v HMRC [2026] UKFTT 1108 (TC) on 30 July 2026.

Corporate Residence

The key substantive issue was whether Cogefin, a company incorporated in Bermuda to act as an investment vehicle for an offshore trust, was resident in the UK for corporation tax purposes from 1999 to 2017. This turned on whether central management and control of Cogefin was exercised by Mr Ciardi, the economic settlor and beneficiary of the offshore trust and a successful investment banker resident in the UK, or Cogefin’s directors, Bermudian resident lawyers and the directors of the trustee company of the offshore trust, during that period.

The FTT determined that Cogefin was resident in the UK from 1999 to 2017 because central management and control was exercised by Mr Ciardi, rather than the directors, throughout that period. The FTT found the directors effectively abdicated decision-making to Mr Ciardi in all spheres of Cogefin’s activity, from multi-million pound investments in hedge funds and loans to energy companies through to routine administrative acts such as the payment of property taxes. The directors, in essence, viewed themselves as trustees and treated Mr Ciardi’s communications as if they were instructions provided by the beneficial owner of the trust.

The Discovery Assessments

The key procedural issue was whether each of the discovery assessments issued by HMRC to Cogefin had been validly made. The FTT concluded that those assessments had been validly made. HMRC’s officer had made a valid discovery in respect of each accounting period. The assessments for 1999 to 2014 had been made in time and in accordance with the applicable legislation. In particular, Cogefin had no reasonable excuse for failing to notify HMRC of its chargeability to corporation tax, its failure to notify had brought about a loss of tax, and that loss of tax had been brought about carelessly or negligently (to the extent required).

The Penalties

There was a further issue as to whether the quantum of the penalties issued by HMRC to Cogefin was excessive and whether the penalties issued for 2010 to 2013 were validly made. The FTT held that the penalties issued for 2010 to 2013 had been validly made. However, the

FTT considered that the quantum of all of the penalties issued was excessive, primarily on the basis that it was not open to HMRC to contend that there had been deliberate behaviour and, in any event, neither the directors nor Mr Ciardi had acted deliberately in failing to notify HMRC of Cogefin’s chargeability to corporation tax.

The Personal Liability Notice

The FTT upheld Mr Ciardi’s appeal against the personal liability notice issued to him by HMRC on the basis that there had been no deliberate failure to notify HMRC of Cogefin’s chargeability of corporation tax.

Outcome

Cogefin’s appeal in respect of corporate residence and the validity of the associated discovery assessments was dismissed. Cogefin’s appeal against the penalties was allowed in part. Mr Ciardi’s appeal against the personal liability notice was allowed.

A copy of the FTT’s judgment can be found here.

Akash Nawbatt KC, Kate Balmer, Max Schofield, Matthew Bignell, and Elizabeth Atkinson appeared as counsel for HMRC.