When calculating the chargeable gain on granting an option to purchase land, the costs of obtaining releases of restrictive covenants necessary to make the option worthwhile could not be deducted. Citations: Times 01-Dec-1998, [1998] EWCA Civ 1837 Statutes: Capital Gains Tax Act 1979 19(1)(a) Jurisdiction: England and Wales Capital Gains Tax Updated: 27 November 2022; … Continue reading Garner (HM Inspector of Taxes) v Pounds Shipowners and Shipbreakers Ltd and Garner (Hm Inspector of Taxes) v Pounds: CA 25 Nov 1998
Security exchange losses on interest-bearing loan were not to be set off against capital gains as being a debt on a security even though secured. Being simply secured itself was insufficient to make a debt a debt on a security. Citations: Times 02-Dec-1998, [1998] EWCA Civ 1789 Statutes: Capital Gains Tax Act 1979 134 Jurisdiction: … Continue reading Taylor Clark International Limited v Lewis (HM Inspector of Taxes): CA 18 Nov 1998
The deceased’s adult son sought provision from the intestate estate. The sole beneficiary under the rules was the plaintiff’s mother. The estate was modest; the intestate’s interest in his house (he had been living there with the plaintiff). The widow was found to have a one third interest in it. The judge took the disposable … Continue reading In Re Coventry (deceased): CA 3 Jan 1979
The occupation of a property as an ‘own or main residence’ is a question of fact and degree and ordinary usage. In this case, five weeks occupation by the taxpayer was insufficient to establish the exemption. Citations: Times 02-Mar-1998, Gazette 25-Mar-1998, [1998] EWCA Civ 271, (1998) 70 TC 478 Statutes: Capital Gains Tax Act 1979 … Continue reading Goodwin v Curtis (HM Inspector of Taxes): CA 18 Feb 1998
The cost of the purchase of a release of covenant is deductible from the capital gain realised on the later sale. Citations: Gazette 19-Mar-1997, Times 06-Mar-1997 Statutes: Capital Gains Tax Act 1979 32 Jurisdiction: England and Wales Capital Gains Tax Updated: 14 August 2022; Ref: scu.80754
Parents incapacity to father more children not relevant on vesting entitlement. Number of children entitled not fixed by incapacity to have children but death Citations: Gazette 13-Mar-1996, Times 11-Mar-1996 Statutes: Capital Gains Tax Act 1979 54 Jurisdiction: England and Wales Capital Gains Tax Updated: 06 August 2022; Ref: scu.80516
The choice of house for principal private residence relief is to be made and notified within two years, but is variable at any time. Citations: Ind Summary 03-Jan-1994, Gazette 26-Jan-1994, Times 29-Nov-1993 Statutes: Capital Gains Tax Act 1979 101(5) Jurisdiction: England and Wales Capital Gains Tax Updated: 06 August 2022; Ref: scu.81033
Separate flats were separate entities despite being used for Taxpayer’s family. Citations: Gazette 01-Apr-1992 Statutes: Capital Gains Taxes Act 1979 101 Jurisdiction: England and Wales Capital Gains Tax Updated: 06 August 2022; Ref: scu.81461
Proceeds of the sale of part of a business which had been invested back into the business cannot be rolled over into the acquisition cost of remainder. Judges: Simon Brown LJ Citations: Times 27-Jun-1997, [1997] STC 893 Statutes: Capital Gains Tax Act 1979 115 Jurisdiction: England and Wales Citing: Appeal from – Watton (Inspector of … Continue reading Watton (Inspector of Taxes) v Tippett: CA 27 Jun 1997
Capital Gains Tax relief for a private residence was lost where no permanent occupation was established. Citations: Times 14-Aug-1996 Statutes: Capital Gains Tax Act 1979 101 Jurisdiction: England and Wales Cited by: Appeal from – Goodwin v Curtis (HM Inspector of Taxes) CA 18-Feb-1998 The occupation of a property as an ‘own or main residence’ … Continue reading Goodwin v Curtis (Inspector of Taxes): ChD 14 Aug 1996
Loss relief available but reduced by contributions from others. Citations: Gazette 13-Jan-1993 Statutes: Capital Gains Tax Act 1979 136-4 Jurisdiction: England and Wales Corporation Tax Updated: 10 July 2022; Ref: scu.83026
SCIT CORPORATION TAX – chargeable gains – valuation – unlisted shares – property investment company – 1982 valuation – sections 150 and 152 Capital Gains Tax Act 1979 – asset method – gross yield method Citations: [2006] UKSPC SPC00522 Links: Bailii Corporation Tax Updated: 05 July 2022; Ref: scu.240287
The land was owned by members of family in undivided shares. Contracts were exchanged for its sale, but the land was divided before the sale was completed. Part of the land had come to be in the ownership of trusts in Bermuda. The Inspector sought to assess the British resident taxpayer with the chargeable gain … Continue reading Jerome v Kelly (Inspector of Taxes): ChD 15 Apr 2002
HL Capital gains tax – Disposal of a right to what was termed a ‘royalty’ – Whether a disposal of a right to an ‘annual payment due under a covenant not secured on any property – Finance Act 1965 (c 25), Sch 7, para 12(c). Citations: [1979] UKHL TC – 53 – 185, [1979] 3 … Continue reading Rank Xerox Ltd v Lane (Inspector of Taxes): HL 25 Oct 1979
The court considered whether corporation tax had to be paid as an expense of the liquidation in priority to other claims. In that case it had arisen not on profits but on chargeable gains, on sales of the company’s properties after the commencement of the winding up. Held: ‘section 243(2) of the Income and Corporation … Continue reading In re Mesco Properties Ltd: ChD 1979
A cottage which was not within the curtilage of the taxpayer’s residence was not entitled to the main residence exemption upon realisation on sale. Citations: Gazette 08-Apr-1992 Statutes: Capital Gains Tax Act 1979 101 Jurisdiction: England and Wales Capital Gains Tax Updated: 15 May 2022; Ref: scu.89313
The indexation allowance was to be applied before the straight line apportionment. Citations: Ind Summary 26-Apr-1993 Statutes: Capital Gains Tax Act 1979 Jurisdiction: England and Wales Capital Gains Tax Updated: 15 May 2022; Ref: scu.89314
Exchange rate changes were irrelevant to a tax calculation though in foreign currency. Citations: Times 24-Jan-1997 Statutes: Capital Gains Tax Act 1979 40(2) Jurisdiction: England and Wales Capital Gains Tax Updated: 15 May 2022; Ref: scu.80907
(Year?) The taxpayer claimed an industrial buildings allowance against his tax liabilities for a warehouse used as storage as a trade in itself. Two thirds of the use was for storage of finished goods awaiting collection or delivery. The taxpayers were the sole selling agents for various manufacturers and were obliged under the agreement with … Continue reading Dale (HM Inspector of Taxes) v Johnson Brothers: 1951
The landlord of light industrial premises sought damages from his tenant for breach of the user covenant in the lease. This permitted the premises to be used, inter alia, as an ‘industrial building or structure’ as defined by the Capital Allowances Act 1968. The tenant was in business of purchasing used tyres, storing and inspecting … Continue reading Crusabridge Investments Ltd v Casings International Limited: 1979
The costs of negotiating, and valuing the market value of shares with the Inland Revenue, are not deductible as expenses. Citations: Times 16-Jul-1997, [1997] EWCA Civ 1898 Statutes: Capital Gains Tax Act 1979 32(2)(b) Jurisdiction: England and Wales Capital Gains Tax Updated: 23 March 2022; Ref: scu.79530
Roll-over relief was not available for the disposal of part only of a commercial asset. Citations: Gazette 17-Jan-1996, Times 21-Dec-1995 Statutes: Capital Gains Tax Act 1979 115(1) 115(3) Jurisdiction: England and Wales Citing: Appealed to – Watton (Inspector of Taxes) v Tippett CA 27-Jun-1997 Proceeds of the sale of part of a business which had … Continue reading Watton (Inspector of Taxes) v Tippett: ChD 21 Dec 1995
CAPITAL GAINS TAX – former hotel and rear land – value as at March 1982 – need for comprehensive development – uncertain planning position – rear land subject to lease – value determined at pounds 230,000 – Capital Gains Tax Act 1979, s150 [2002] EWLands TMA – 15 – 2001 Bailii CAPITAL GAINS TAX – … Continue reading Kirkwood (Inspector of Taxes) v Boland: LT 12 Aug 2002
The House considered the meaning of the word ‘bounty’ in an income tax context, where it had been used by the courts: ‘My Lords, I would venture to point out that the word ‘bounty’ appears nowhere in the statute. It is a judicial gloss upon the statute descriptive of those classes of cases which are … Continue reading Chinn v Hochstrasser (Inspector of Taxes): HL 11 Dec 1980
The House gave guidance how it would treat an invitation to depart from a previous decision of the House. Such a course was possible, but the direction was not an ‘open sesame’ for a differently constituted committee to prefer their views to those of the committee which determined the decision unanimously or by a majority. … Continue reading Practice Statement (Judicial Precedent): HL 1966
The court set out the general approach to applications under the 1975 Act: ‘these matters have to be considered at two stages – first in determining the reasonableness of such provision (if any) as has been made by the deceased for the applicant’s maintenance and, secondly, in determining the extent to which the court should … Continue reading In re Coventry dec’d: ChD 2 Jan 1979
Currency fluctuation losses arising from a loan to a subsidiary overseas company were not allowable against capital gains tax. The words ‘the debt on a security’ in section 117(1)can refer to an obligation to pay or repay embodied in the Loan Note, . .
In 1987, trustees holding land for various beneficiaries in undivided shares entered into a contract to sell it to a purchaser. In 1989 Mr and Mrs Jerome, who were absolutely entitled to interests in the land, assigned part of their beneficial . .
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LT TAX – corporation tax – market value in June 1988 – backland formerly part of petrol filling station – likely grant of planning permission for housing – access – comparables – value determined at andpound;900,000 – Capital Gains Tax Act 1979, s150 Citations: [2003] EWLands TMA/89/2002 Links: Bailii Statutes: Capital Gains Tax Act 1979 … Continue reading Faraday v Carmarthanshire County Council: LT 20 Oct 2003
Extension of lease by Act was not effective to increase term from 16 to 50 years. Citations: Gazette 26-Feb-1992 Statutes: Capital Gains Tax Act 1979 106 Jurisdiction: England and Wales Capital Gains Tax Updated: 04 June 2022; Ref: scu.83048
The claimant was disabled, and sought sterilisation because she feared the additional difficulties she would face as a mother. The sterilisation failed. She sought damages. Held: The House having considered the issue in MacFarlane only recently it was inappropriate to change the rules set down in that case. Nothing had been put forward to argue … Continue reading Rees v Darlington Memorial Hospital NHS Trust: HL 16 Oct 2003
The claimant sought additional provision from her father’s estate. She said that the will failed to make reasonable provsion for her, bearing in mind her extreme financial needs. She was a single mother of three. Held: The claim failed. Michael Furness QC J said: ‘the most important factors are first the financial position of the … Continue reading Garland v Morris and Another: ChD 11 Jan 2007
The Revenue had published a booklet, IR20, setting out their approach to the interpretation of the phrases ‘residence’ and ‘ordinary residence’. The taxpayer said that this was a more generous definition than the statutory one, and that having acted on it he had a legitimate expectation that the booklet’s interpretation would continue to be applied. … Continue reading Davies and Another, Regina (on The Application of) v Revenue and Customs: SC 19 Oct 2011
The Revenue sought to disallow for industrial buildings allowance sums expended on warehouse premises which were to be used to store window products imported for use in other manufacturing processes. Held: The Revenue’s appeal succeeded. ‘The question under s.18(1) is whether the warehouse is in use for the purposes of a trade which consists in … Continue reading Revenue and Customs v Maco Door and Window Hardware (Uk) Ltd: ChD 19 Jul 2006
The company had ceased trading, but rental income was still generated from its former premises. The Revenue sought to include the receipt in calculations of whether the company was entitled to a small company corporation tax rate. The Revenue appealed the special commissioner’s decision that it was not a business income. Held: The appeal failed. … Continue reading HM Revenue and Customs v Salaried Persons Postal Loans Ltd: ChD 7 Apr 2006
LT TAX – corporation tax – market value in June 1988 – backland formerly part of petrol filling station – likely grant of planning permission for housing – access – comparables – value determined at andpound;900,000 – Capitals Gains Tax Act 1979, s150 Citations: [2003] EWLands TMA – 89 – 2002 Links: Bailii Statutes: Capitals … Continue reading Ellis v Norbury Hill Ltd: LT 20 Oct 2003
The claimant, the estranged adult daughter of the deceased, had claimed under the 1975 Act. The judge made an order for payment of pounds 50,000 by way of capitalisation of maintenance. The claimant appealed saying she should have received more, and the charities (beneficiaries under the will) said that no payment should have been ordered … Continue reading Ilott v Mitson and Others: CA 31 Mar 2011
What is reasonable provision for daughter? The deceased had left her estate in her will to several animal charities. The claimant, her daughter, had been estranged from her mother for many years, and sought reasonable provision from her estate under the 1975 Act. The district judge had rejected her claim. Held: The appeal by the … Continue reading Ilott v The Blue Cross and Others: SC 15 Mar 2017
Mrs Nolan had been employed at a US airbase. When it closed, and she was made redundant, she complained that the appellant had not consulted properly on the redundancies. The US denied that it had responsibility to consult, and now appealed. Held: The appeal failed (Lord Carnworth dissenting). That the exact situation might not have … Continue reading The United States of America v Nolan: SC 21 Oct 2015
The appellants were all Danish companies put into liquidation for asset stripping in contravention of Danish law. The respondent was resident in the UK and had owned them. The Danish tax authorities issued tax demands and the liquidators now sought a similar sum in damages against the respondent. Held: An English court will not enforce … Continue reading QRS 1 APS and others v Frandsen: CA 21 May 1999
Steps which had been inserted into a commercial transaction, but which had no purpose other than the saving of tax are to be disregarded when assessing the tax effect of the scheme. The modern approach to statutory construction is to have regard to the purpose of a particular provision and interpret its language, so far … Continue reading Commissioners of Inland Revenue v McGuckian: HL 21 May 1997
The House considered whether under the 1992 Regulations a self-employed parent could use for his child support calculation his net earnings as declared to the Revenue, which would allow deduction of capital and other allowances properly claimed against tax. Held: The appeal was allowed, and the decision of the Child Support Commissioner restored (majority). The … Continue reading Smith v Secretary of State for Work and Pensions and Another: HL 12 Jul 2006
Charitable Company- Directors’ Status and Duties A married couple set up a charitable foundation to assist children in developing countries. When the marriage failed an attempt was made to establish a second foundation with funds from the first, as part of W leaving the Trust. Court approval was obtained, but the court ordered the remaining … Continue reading Lehtimaki and Others v Cooper: SC 29 Jul 2020
The court considered whether expenses, premiums paid in respect of life assurance policies, and the fees of professional investment managers, were properly to be set against the capital or income of a trust. Held: Lord Templeman said: ‘Trustees are entitled to be indemnified out of the capital and income of their trust fund against all … Continue reading Carver v Duncan: HL 1985
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the pleaded facts, Mr Chopra and Mr Nazir were the directing organ of Bilta under its constitution. … Continue reading Jetivia Sa and Another v Bilta (UK) Ltd and Others: SC 22 Apr 2015
The taxpayers used schemes to create allowable losses, and now appealed assessment to tax. The schemes involved a series of transactions none of which were a sham, but which had the effect of cancelling each other out. Held: If the true nature of the transactions could be seen by looking at them all together, then … Continue reading W T Ramsay Ltd v Inland Revenue Commissioners: HL 12 Mar 1981
PAC sought to recover excess advance corporation tax paid under a UK system contrary to EU law. It was now agreed that some was repayable but now the quantum. Five issues separated the parties. Issue I: does EU law require the tax credit to be set by reference to the overseas tax actually paid, as … Continue reading Prudential Assurance Company Ltd v Revenue and Customs: SC 25 Jul 2018
The Court was asked ‘Do the principles referable to the admissibility of fresh evidence on appeal, as propounded in the decision of the Court of Appeal in Ladd v Marshall [1954] 1 WLR 1489, have any relevance to the determination of a spouse’s application to set aside a financial order in divorce proceedings on the … Continue reading Gohil v Gohil: SC 14 Oct 2015
The claimant was the adult and long estranged daughter of her now deceased mother. The mother’s will left the estate entirely to animal charities. The daughter sought reasonable provision under the 1975 Act. Held: The claimant’s appeal succeeded. The District Judge had made two ‘fundamental’ errors of principle, and these allowed the appeal court to … Continue reading Ilott v Mitson and Others: CA 27 Jul 2015
A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was this an expense properly arising in the insolvency, and payable as … Continue reading Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc: HL 20 Feb 2002
In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. The judge had made such an order, finding evidence that the companies had … Continue reading Prest v Petrodel Resources Ltd and Others: SC 12 Jun 2013
Application of Hastings-Bass Rule F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary trust. Unfortunately it was done in such a way … Continue reading Futter and Another v Revenue and Customs; Pitt v Same: SC 9 May 2013
The defendant had been involved in price fixing arrangements, and the claimant sought damages for breach of its proprietary rights. The claimant appealed refusal of an award an account of profits for what was akin to a breach of statutory duty. Held: The appeal failed. An account of profits should be available in a cartel … Continue reading Devenish Nutrition Ltd v Sanofi-Aventis Sa (France) and others: CA 14 Oct 2008
The appellant, former chair of a road activist group, challenged certain roads orders saying that the respondent had not carried out the required environmental assessment. His claim was that the road had been adopted without the consultation required by the Strategic Environmental Assessment Directive (‘the SEA Directive’), and that that the scope of the public … Continue reading Walton v The Scottish Ministers: SC 17 Oct 2012
The Bank anticipated criticism in an ad hoc enquiry which was called to investigate its handling of a matter involving the claimant. The claimant sought disclosure of the documents created when the solicitors advised employees of the Bank in preparing to present the Bank’s case, and the Bank now appealed an order granting such access, … Continue reading Three Rivers District Council and others v Governor and Company of the Bank of England (No 6): HL 11 Nov 2004
The taxpayer insurance company had transferred sums from accounts designated as Capital Reserves. The Revenue said that these were properly part of the profit and loss accounts for the respective tax years, and chargeable receipts. Held: The Revenue’s cross appeal succeeded. As a life assurance company, the amounts to be taken into account in computing … Continue reading Scottish Widows Plc v Revenue and Customs: SC 6 Jul 2011
The plaintiff had bought a house on the faith of the defendant’s report that there were only limited defects requiring repair. In fact the defects were much more extensive. The defendant surveyor appealed against an award of damages after his negligent survey of a property. The plaintiff sought damages for distress, and the cost of … Continue reading Watts and Co v Morrow: CA 30 Jul 1991
It had been alleged that there had been a conspiracy involving the company giving unlawful financial assistance for the purchase of its own shares.
Held: Dishonesty is not a necessary ingredient of liability in an allegation of a ‘knowing . .
The purchaser of land created a sub-sale and leaseback with bank so as to fund the purchase in a manner which would comply with Islamic finance principles. The Court was now asked whether purchaser or the bank were liable for stamp duty land tax on . .
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