Harper v Revenue and Customs: FTTTx 29 Dec 2009

FTTTx LOSS RELIEF – shares of negligible value – TCGA 1992 s 24(2), ICTA s 574 – whether shares ‘became’ of negligible value – value of shares at dates of allotment – values found to be negligible at those dates – relief not available – appeal dismissed

Citations:

[2009] UKFTT 382 (TC)

Links:

Bailii

Capital Gains Tax

Updated: 17 August 2022; Ref: scu.409145

Inland Revenue Commissioners v Scottish Provident Institution: HL 25 Nov 2004

The parties anticipated a change in the system for taxing gains on options to buy or sell bonds and government securities. An option would be purchased before the change and exercised after the change to create losses which could be set off against other taxable gains. The risk to the market maker (Citibank) was set off by a collateral agreement.
Held: The options should be treated as a single transaction, and ineffective to achieve the tax saving intended. The minimal risk that the option would not be exercised because of a fall in prices was not sufficient to displace the fact that the purpose of transaction was not economic but to save tax: ‘We think that it would destroy the value of the Ramsay principle of construing provisions such as section 150A(1) of the 1994 Act as referring to the effect of composite transactions if their composite effect had to be disregarded simply because the parties had deliberately included a commercially irrelevant contingency, creating an acceptable risk that the scheme might not work as planned.’
Corporation tax – Cross options in respect of gilts – Collateral amount – Ramsay principle – Whether options self-cancelling – Whether single composite transaction with no commercial purpose other than tax avoidance – Whether commercially irrelevant contingency prevented finding of single composite transaction – Whether appropriate to compute profit and loss in respect of each option on a mark to market basis – Whether each option a qualifying contract – Whether appropriate to attach a nil value to each option on morning of 1 April 1996 – Whether appropriate to exclude collateral amount from computation – Debt contracts – Interpretation of deeming provisions – Finance Act 1994, ss 147A, 150A, 154, 155, 156 and 177(2), Finance Act 1996, Sch 15, para 25.
In applying a purposive interpretation of a taxing provision in the context of a tax avoidance scheme it is legitimate to look to the composite effect of the scheme as it was intended to operate. Lord Nicholls said: ‘The composite effect of such a scheme should be considered as it was intended to operate and without regard to the possibility that, contrary to the intention and expectations of the parties, it might not work as planned.’

Judges:

Lord Nicholls of Birkenhead, Lord Steyn, Lord Hoffmann, Lord Hope of Craighead and Lord Walker of Gestingthorpe

Citations:

[2004] UKHL 52, Times 26-Nov-2004, [2005] 1 All ER 325, [2005] 1 WLR 3172, [2004] UKHL TC – 76 – 538

Links:

Bailii, House of Lords, Bailii

Statutes:

FinanceAt 1994

Jurisdiction:

Scotland

Citing:

Appeal fromCommissioners of Inland Revenue v The Scottish Provident Institution OHCS 3-Jul-2003
The parties arranged for the issue of cross options for the purchase of gilts, which would prove when exercised to be very tax effective when a new system of taxing such transaction was in place, and planned losses could be set off against taxable . .
CitedW T Ramsay Ltd v Inland Revenue Commissioners HL 12-Mar-1981
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 . .
CitedCraven v White HL 1988
The inland revenue claimed that several transactions had been arranged for the predominant purpose of obtaining a tax advantage, and that accordingly they should be disregarded. Lord Oliver: ‘[T]he transactions which, in each appeal, the Inland . .

Cited by:

CitedUBS Ag and Another v Revenue and Customs SC 9-Mar-2016
UBS AG devised an employee bonus scheme to take advantage of the provisions of Chapter 2 of the 2003 Act, with the sole purpose other than tax avoidance, and such consequential advantages as would flow from tax avoidance. Several pre-ordained steps . .
CitedRFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland SC 5-Jul-2017
The Court was asked whether an employee’s remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 16 August 2022; Ref: scu.219870

Commissioners of Inland Revenue v The Scottish Provident Institution: OHCS 3 Jul 2003

The parties arranged for the issue of cross options for the purchase of gilts, which would prove when exercised to be very tax effective when a new system of taxing such transaction was in place, and planned losses could be set off against taxable gains elsewhere. The premiums were fixed by market forces, and there was a small risk that an overall loss would arise.

Judges:

Lady Cosgrove And Lord Eassie And Lord President

Citations:

[2003] ScotCS 188, [2003] STC 1035

Links:

Bailii

Jurisdiction:

Scotland

Cited by:

Appeal fromInland Revenue Commissioners v Scottish Provident Institution HL 25-Nov-2004
The parties anticipated a change in the system for taxing gains on options to buy or sell bonds and government securities. An option would be purchased before the change and exercised after the change to create losses which could be set off against . .
CitedRFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland SC 5-Jul-2017
The Court was asked whether an employee’s remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 16 August 2022; Ref: scu.190900

Couch (Inspector of Taxes) v Administrators of the Estate of P S Caton Deceased: ChD 28 Dec 1995

The costs of negotiating with the Inland Revenue a valuation of shares, and of the appeal, were not deductible from the chargeable gain.

Citations:

Times 28-Dec-1995, Ind Summary 29-Jan-1996

Statutes:

Chargeable Gains Act 1992 32 38(2)(b)

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 14 August 2022; Ref: scu.79531

Lee, Bunter v Revenue and Customs: UTTC 21 Dec 2020

CAPITAL GAINS TAX – taper relief- disposal of shares-periods when shares qualified consecutively as non-business assets and as business assets-how to allocate gain arising in the two periods-Taxation of Chargeable Gains Act 1992 Schedule A1 paragraphs 3 and 21

Citations:

[2020] UKUT 363 (TCC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 09 August 2022; Ref: scu.658110

Griffin (Inspector of Taxes) v Craig-Harvey: ChD 26 Jan 1994

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

Hitch and Others v Stone (Inspector of Taxes): ChD 7 Apr 1999

A tax avoidance scheme was effective despite being complex and artificial. The documents affected third party rights in potential development land, and it was impossible to conclude it was a sham.

Citations:

Times 07-Apr-1999

Jurisdiction:

England and Wales

Cited by:

Appeal fromRoger Stone (HM Inspector of Taxes) v Richard Henry Hitch; Thomas Henry Hitch and Ian Geoffrey Handy CA 26-Jan-2001
The essence of whether a deed was a sham, was whether the deed proclaimed one set of intentions, but the parties acted out another. The deeds in this case were capable of being seen as a sham as respects one or more deeds in the combination of . .
Appeal fromStone (HM Inspector of Taxes) v Hitch and others CA 26-Jan-2001
As an exception to the general rule, it is not invariably necessary to show, in relation to multi party transactions, that every party to it knew it was a sham.
Arden LJ said: ‘Third, the fact that the act or document is uncommercial, or even . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 06 August 2022; Ref: scu.81395

Pattullo v Revenue and Customs: UTTC 14 Jun 2016

CAPITAL GAINS TAX – Discovery assessment; tax avoidance scheme involving capital redemption policies; when HMRC officer discovered that assessment was insufficient; whether there can be a series of discoveries; whether the discovery became stale; TMA 1970 s 29(1); whether officer could not have been reasonably expected to be aware of the insufficiency at earlier date; attributes of the hypothetical officer; what constitutes such awareness; tests to be applied; TMA 1970 s 29(5); Appeal dismissed

Citations:

[2016] UKUT 270 (TCC), [2016] BTC 510, [2016] STC 2043

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 05 August 2022; Ref: scu.567357

McNulty v HMRC: UTTC 25 May 2012

UTTC Capital gains tax – appeal by taxpayer to First-Tier Tribunal – taxpayer previously a bankrupt – application to strike out appeal – whether taxpayer had locus standi to appeal – whether appeal settled by trustee in bankruptcy in accordance with s. 54 Taxes Management Act 1970.

Citations:

[2012] UKUT 174 (TCC)

Links:

Bailii

Statutes:

Taxes Management Act 1970 54

Jurisdiction:

England and Wales

Capital Gains Tax, Taxes Management

Updated: 05 August 2022; Ref: scu.462879

Segesta Ltd v HMRC: UTTC 29 May 2012

UTTC Capital Gains Tax (CGT) – Enterprise Investment Scheme (EIS) – reinvestment relief – TCGA 1992, Sch 5B – whether subscription for eligible shares – whether amount received by subscriber in relevant period was repayment of debt within Sch 5B -nature of conditions to be satisfied for entitlement to reinvestment relief

Citations:

[2012] UKUT 176 (TCC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 05 August 2022; Ref: scu.462883

Klincke v Revenue and Customs: FTTTx 1 Jul 2009

FTTTx CGT – Exemption and relief – Disposal of qualifying corporate bond: (‘QCB’) – Taxpayer acquiring loan notes in exchange for shares – Loan notes not QCBs at time of acquisition – Loan notes containing currency conversion right exercisable by issuer – Right cancelled – Whether notes becoming QCBs following cancellation of issuer’s currency conversion right – TCGA 1992 s117(2)
CGT – Conversion of securities – Crystallisation of capital gain on securities while non-QCBs – Whether transaction required to cancel issuer’s currency conversion right amounted to conversion – Yes – TCGA 1992 s132

Citations:

[2009] UKFTT 156 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 03 August 2022; Ref: scu.373702

Watton (Inspector of Taxes) v Tippett: CA 27 Jun 1997

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 fromWatton (Inspector of Taxes) v Tippett ChD 21-Dec-1995
Roll-over relief was not available for the disposal of part only of a commercial asset. . .

Cited by:

CitedWardhaugh (Inspector of Taxes) v Penrith Rugby Union Football Club ChD 10-May-2002
The taxpayer had accepted a grant toward the building of a new club house. They sought rollover relief on the proceeds of sale of the former club house. The inspector sought to restrict the claim to exclude the benefit of the grant.
Held: The . .
Appealed toWatton (Inspector of Taxes) v Tippett ChD 21-Dec-1995
Roll-over relief was not available for the disposal of part only of a commercial asset. . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 31 July 2022; Ref: scu.90328

Adams v Revenue and Customs: FTTTx 30 Apr 2009

FTTTx CAPITAL GAINS TAX – Disposal of shares – Majority shareholder in unquoted company – Consideration included earn-out rights – Whether valid election under TCGA 1992 s.138A – Return with computation on basis that election although no election in terms – No other possible explanation for computation – Held valid election – Appeal allowed
Neglect – No negligent conduct by agent in return – In any event TMA s.36(3) would have covered late election at appeal

Citations:

[2009] UKFTT 80 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 30 July 2022; Ref: scu.373593

Coll and Another v Revenue and Customs: FTTTx 21 Apr 2009

FTTTx CAPITAL GAINS TAX – Disposal of shares for loan notes – whether the exchange formed part of a scheme or arrangements of which the main purpose or one of the main purposes, is avoidance of liability to capital gains tax- Yes – section 137 Taxation of Capital Gains Act 1992 – Appeal dismissed
PENALTY ASSESSMENT – Whether 1997/98 return containing incorrect statement about the status of clearance application was made fraudulently or negligently – made negligently – quantum of penalty reduced from 85 per cent of tax due to 30 per cent – Appeal allowed in part.

Citations:

[2009] UKFTT 61 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 30 July 2022; Ref: scu.373601

Goodwin v Curtis (Inspector of Taxes): ChD 14 Aug 1996

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 fromGoodwin v Curtis (HM Inspector of Taxes) CA 18-Feb-1998
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. . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 25 July 2022; Ref: scu.80920

Sanderson v HM Revenue and Customs: CA 21 Jan 2016

Judges:

Patten, Briggs, Simon LJJ

Citations:

[2016] EWCA Civ 19, [2016] STI 237, [2016] BTC 3, [2016] 4 WLR 67, [2016] WLR(D) 49, [2016] STC 638, [2016] 3 All ER 203

Links:

Bailii, WLRD

Statutes:

Taxes Management Act 1970 29

Jurisdiction:

England and Wales

Taxes Management, Capital Gains Tax

Updated: 19 July 2022; Ref: scu.559158

Weston v Garnett (Inspector of Taxes): ChD 25 Jun 2004

The taxpayer entered into a scheme for the issue and disposal of corporate loans. He appealed a finding that the loans were caught by section 115 which disallowed exemption because they did not represent a normal commercial loan.
Held: It was a requirement that the debt ‘has at all times represented a normal commercial loan’, which phrase was defined by the 1988 Act. The loan notes were pregnant with profit, and were convertible after six months into new loan notes of the same par value. The second loan notes would, after a similar delay be convertible into shares in the company. The right of conversion carried an indirect right of conversion into something other than corporate bonds. The commissioners decision was correct. ‘I rest my decision on the wording of section 117(1). The rights carried by the first loan notes included the rights to convert into the shares of Carraldo, and the process by which those rights could be exercised was mere machinery. Those rights fell within section 117 and preclude the characterisation of those loan notes as normal commercial loans within the meaning of that section. For those reasons, which do no more than echo the reasoning of [the special commissioner] at paragraph 15 of his decision, this appeal is dismissed.’

Judges:

Moses J

Citations:

Times 07-Jul-2004, [2004] EWHC 1607 (Ch), [2005] STC 617

Statutes:

Taxation of Chargeable Gains Act 1992 115, Income and Corporation Taxes Act 1988 Sch18 para1(5)

Jurisdiction:

England and Wales

Cited by:

Appeal fromWeston v Garnett (HM Inspector of Taxes) CA 16-Jun-2005
Convertible loan notes had been issued as a channel for future gains.
Held: The loan notes were not a normal commercial loan as defined in Schedule 18 to the 1988 Act, and therefore did not fall within the section so as to allow qualification . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 18 July 2022; Ref: scu.199329

Davies and Another, Regina (on The Application of) v Revenue and Customs: SC 19 Oct 2011

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.
Held: The appeals failed (Lord Mance dissenting). The interpretations argued for by the taxpayers of the IL20 guidance did not apply. To lose British residence there had to be a ‘distinct break’ with life in the UK. This requred a multifactorial assessment, amongst which the taking of a permanent employment will carry geat weight. HMRC was bound by the guidance, but it was not as suggested.

Judges:

Lord Hope, Deputy President, Lord Walker, Lord Mance, Lord Clarke, Lord Wilson

Citations:

[2011] UKSC 47

Links:

Bailii Summary, Bailii

Statutes:

Income and Corporation Taxes Act 1988 334

Jurisdiction:

England and Wales

Citing:

At SCITGaines-Cooper v Revenue and Customs SCIT 31-Oct-2006
SCIT INCOME TAX – preliminary issues – domicile, residence and ordinary residence in tax years 1992/93 to 2003/2004 – Appellant purchased house in the Seychelles in 1975 and obtained a residency permit in 1976 – . .
At High CourtGaines-Cooper v HM Revenue and Customs ChD 13-Nov-2007
The parties disputed the domicile of the tax-payer. He had a domicile of origin in the UK, but asserted that he had acquired a domicile of choice in the Seychelles. The Special Commissioners had allowed, in assessing the domicile at any time, of . .
Appeal fromGaines-Cooper v Revenue and Customs CA 23-Oct-2008
Renewed application for permission to pursue a second appeal in order to challenge an order of Lewison J, dated 13 November 2007, upholding a decision of the Special Commissioners that the appellant was domiciled in England and Wales in the relevant . .
CitedLevene v Inland Revenue Commissioners HL 1928
Until 1919 Mr. Levene had been both resident and ordinarily resident in the UK. Then, for five years he spent about five months (mainly in the summer) each year, staying in hotels in the UK and receiving medical attention or pursuing religious and . .
Appeal fromDavies and Another, Regina (on The Application of) v HM Revenue and Customs CA 16-Feb-2010
The parties disputed the interpretation of a booklet issued by the Revenue (IR20) as it defined the phrase ‘ordinarily resident’. In particular the taxpayer complained of an unannounced change of practice made after they had arranged their lives . .
AppliedReed v Clark ChD 1986
The taxpayer defendant (C) had been both resident and ordinarily resident in the UK. He moved to Los Angeles in 1978 making his home and business there until May 1979, when, not having set foot in the UK in the interim, he returned to reside in the . .
CitedRegina v Barnet London Borough Council, Ex parte Shah HL 16-Dec-1982
The five applicants had lived in the UK for at least three years while attending school or college. All five were subject to immigration control, four had entered as students with limited leave to remain for the duration of their studies, and the . .
Lists of cited by and citing cases may be incomplete.

Taxes Management, Capital Gains Tax

Updated: 18 July 2022; Ref: scu.447485

Davies and Another v Revenue and Customs: CA 11 Apr 2008

Citations:

[2008] EWCA Civ 497

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

CitedDavies and Another, Regina (on The Application of) v HM Revenue and Customs CA 16-Feb-2010
The parties disputed the interpretation of a booklet issued by the Revenue (IR20) as it defined the phrase ‘ordinarily resident’. In particular the taxpayer complained of an unannounced change of practice made after they had arranged their lives . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 17 July 2022; Ref: scu.269966

O’Sullivan v HM Inspector of Taxes: ChD 6 Oct 2005

The taxpayer appealed a refusal of full taper relief on the sale of a share for one million pounds, declining to allow any relief for the period prior to April 5 1998.
Held: There was no basis in the statute for seeking any other interpretation than that indexation allowances were only allowed for gains after that date. The appeal failed.

Judges:

Lawrence Collins J

Citations:

Times 13-Oct-2005, [2005] EWHC 2130 (Ch)

Links:

Bailii

Statutes:

Taxation of Chargeable Gains Act 1992 2A

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 15 July 2022; Ref: scu.231097

Core and Another v Revenue and Customs: FTTTx 31 Oct 2020

Capital Gains Tax – Relief On Disposal of Private Residence – appellants lived in property for only 6-8 weeks – unsolicited offer to buy the property received from a neighbour – did the occupation of the property have the nature and quality of residence? – held, yes, as appellants intended to live there indefinitely until offer accepted – appeal allowed

Citations:

[2020] UKFTT 440 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 14 July 2022; Ref: scu.656827

Drummond v Revenue and Customs: SCIT 5 Jul 2007

SCIT CAPITAL GAINS TAX – Computation of gain – Second hand life assurance policy – Surrender proceeds brought into computation of chargeable event gain for income tax – Whether surrender proceeds to be excluded as disposal consideration for CGT purposes – No – TCGA 1992 s37(1)
CAPITAL GAINS TAX – Acquisition consideration – Wholly and exclusively for the acquisition of the asset – Second hand life assurance policies acquired for andpound;210,000 above surrender value as part of tax avoidance scheme – Whether entire consideration incurred for acquisition of the policies or as part of pre-ordained tax avoidance scheme – Whether alternatively the andpound;210,000 was consideration for acquisition of the policies – No – Appeal dismissed – TCGA s.38(1)

Citations:

[2007] UKSPC SPC00617, [2007] STI 1818, [2007] STC (SCD) 682

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 11 July 2022; Ref: scu.259271

Ano (No 1) Ltd v Revenue and Customs (Capital Gains Tax/Taxation of Chargeable Gains : Groups of Companies): FTTTx 24 Jun 2019

CORPORATION TAX – tax on capital gains – pre-entry loss rules: Sch7A TCGA – para 1(7) meaning of ‘immediately’ – meaning of ‘had assets’; application of Ramsay.

Citations:

[2019] UKFTT 406 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 11 July 2022; Ref: scu.639108

HM Revenue and Customs v Smallwood: CA 17 May 2007

The taxpayer had put money into a enterprise zone property unit trust. That money had gone into refurbishment. Several years later the property was sold with a substantial profit, and the trust managers arranged the distributions so that no balancing charge arose.
Held: The Act did not work so as to restrict the application of enterprise zone losses.

Judges:

Sedley LJ, Carnwath LJ, Lawrence Collins LJ

Citations:

Times 07-Jun-2007, [2007] EWCA Civ 462

Links:

Bailii

Statutes:

Taxation of Chargeable Gains Act 1992 41(2)

Jurisdiction:

England and Wales

Citing:

At SCITSmallwood v Revenue and Customs SCIT 3-Nov-2005
SCIT CAPITAL GAINS TAX – Allowable losses – Disposal of units in enterprise zone property unit trust – Capital allowances made to Appellant – Whether Appellant’s allowable expenditure to be restricted by capital . .
Appeal fromRevenue and Customs v Smallwood ChD 6-Jul-2006
The Revenue appealed dismissal of its claim for assessment to tax of distributions received from taxpayers units in an enterprise zone property.
Held: The appeal failed. Legislation had since prevented 100% capital allowance claims. . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 11 July 2022; Ref: scu.252385

Eyretel Unapproved Pension Scheme and others v Revenue and Customs: SCIT 12 Nov 2008

SCIT CAPITAL GAINS TAX – tax avoidance scheme – whether subscription for shares followed by the return of the subscription money by way of dividend (by an unlimited company), followed by disposal of the shares for a nominal amount five months after the subscription was a self-cancelling composite transaction – yes – whether HMRC can tax the settlor on the trustees’ gain under s 77 TCGA 1992 when the did not open an enquiry into the trustees’ return which claimed an offsetting loss – yes – whether (assuming that the dividend had not been ignored as part of the composite transaction) the settlor was taxable on the dividend under s 660A Taxes Act 1988 – no – or whether the trustees were taxable on it under s 686 – no.

Citations:

[2008] UKSPC SPC00718

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988 660A

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 10 July 2022; Ref: scu.278760

Fd Fenston Will Trusts v Revenue and Customs: SCIT 7 Feb 2007

FTTTx CAPITAL GAINS TAX – Computation of gains – Expenditure – Shares – Capital contributions to Delaware Company – Whether incurred ‘on the asset’ – Yes – Whether reflected in the state or nature of the asset the time of disposal – No – Appeal dismissed – TCGA 1992 s.38(1)(b)

Citations:

[2007] UKSPC SPC00589

Links:

Bailii

Capital Gains Tax

Updated: 10 July 2022; Ref: scu.251319

Gilbert v Revenue and Customs (Capital Gains Tax/Taxation of Chargeable Gains : Other): FTTTx 8 Aug 2018

CGT – late delivery of return by non resident on sale of UK house – penalty – reasonable excuse: ignorance of the law -whether penalty had to be assessed by a named officer: Khan considered

Citations:

[2018] UKFTT 437 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 08 July 2022; Ref: scu.632246

Wickenden v Revenue and Customs (Capital Gains Tax/Taxation of Chargeable Gains : Other) 465 (TC): FTTTx 19 Jul 2018

NON-RESIDENT CAPITAL GAINS TAX – penalties for failing to file a return on time – whether ignorance of the obligation to file the return could amount to a reasonable excuse – yes – appeal upheld

Citations:

[2018] UKFTT 465 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 06 July 2022; Ref: scu.632231

Wickenden v Revenue and Customs (Capital Gains Tax/Taxation of Chargeable Gains : Other) 464 (TC): FTTTx 19 Jul 2018

NON-RESIDENT CAPITAL GAINS TAX – penalties for failing to file a return on time – whether ignorance of the obligation to file the return could amount to a reasonable excuse – yes – appeal upheld

Citations:

[2018] UKFTT 464 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 06 July 2022; Ref: scu.632230

Balloon Promotions Ltd and others v Revenue and Customs: SCIT 3 Mar 2006

SCIT CAPITAL GAINS TAX – Roll-relief – Goodwill – Franchisor purchasing Franchisees’ restaurant businesses – part of the consideration allocated to goodwill not inherent in the property of the restaurant business – whether HM Revenue and Customs were bound by the terms of the contract of sale which was honestly reached and at arms length – no – whether as a matter of law ownership of goodwill in the franchisees’ businesses belonged to the franchisor – no – principally a question of fact – was goodwill attached to the franchisees’ restaurant businesses – yes – did the franchisees own the goodwill – yes – did the franchise agreements on termination realise considerable added value for the purchaser – no – the franchisor already had ownership of the brand – did the consideration obtained for goodwill qualify for roll-over relief – yes – should all or part of the consideration allocated to goodwill be apportioned to compensation for early termination of the franchise agreements – no – should the consideration obtained for goodwill be apportioned in accordance with section 52(4) TCGA 1992 – no – Appeal allowed in principle – final determination of the quantum of chargeable gains and costs reserved.

Judges:

Michael Tildesley OBE SC

Citations:

[2006] UKSPC SPC00524

Links:

Bailii

Capital Gains Tax

Updated: 05 July 2022; Ref: scu.240288

Smallwood v Revenue and Customs: SCIT 3 Nov 2005

SCIT CAPITAL GAINS TAX – Allowable losses – Disposal of units in enterprise zone property unit trust – Capital allowances made to Appellant – Whether Appellant’s allowable expenditure to be restricted by capital allowances – No – TCGA 1992 s.41(2) – Appeal allowed.

Citations:

[2005] UKSPC SPC00509

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Appeal FromRevenue and Customs v Smallwood ChD 6-Jul-2006
The Revenue appealed dismissal of its claim for assessment to tax of distributions received from taxpayers units in an enterprise zone property.
Held: The appeal failed. Legislation had since prevented 100% capital allowance claims. . .
At SCITHM Revenue and Customs v Smallwood CA 17-May-2007
The taxpayer had put money into a enterprise zone property unit trust. That money had gone into refurbishment. Several years later the property was sold with a substantial profit, and the trust managers arranged the distributions so that no . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 04 July 2022; Ref: scu.235469

Foulser v HM Inspector of Taxes: SCIT 22 Feb 2005

CAPITAL GAINS TAX – shareholder giving shares in private company to a company held within an insurance bond – whether the former shareholder and the insurance company were connected persons as acting together to secure or exercise control of the donee company with the result that s 167 TCGA 1992 prevents hold-over relief on the gift of shares from applying – yes – appeal dismissed

Citations:

[2005] UKSPC SPC00462

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Appeal FromFoulser and Another v HM Inspector of Taxes ChD 20-Dec-2005
The taxpayer company entered into an arrangement in which shares were purchased by a company based in Ireland and resold. A claim was made for holdover relief.
Held: The scheme failed. The restriction imposed did not infringe the right of . .
At CommissionersFoulser and Another v Macdougall CA 17-Jan-2007
The taxpayers sought relief after giving shares in a company to another company owned by themselves. The taxpayers appealed refusal of hold over relief in respect of chargeable gains.
Held: The holdings in the recipient company made the . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 03 July 2022; Ref: scu.229938

Revenue and Customs v Collins: ChD 20 Feb 2009

The court was asked whether a sum of pounds 95,179 formed part of the consideration for capital gains tax purposes obtained by the taxpayer when he disposed of his shareholding in a company pursuant to the terms of a share sale agreement . The Special Commissioner had determined this issue in favour of the taxpayer, holding that the sum did not form part of the consideration for the disposal.

Judges:

Henderson J

Citations:

[2009] EWHC 284 (Ch), [2009] BTC 91, [2009] STI 552, [2009] STC 1077

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 01 July 2022; Ref: scu.304543

Wakefield v HM Inspector of Taxes: SCIT 13 Dec 2004

Capital gains tax – rollover relief on reinvestment – whether ‘arrangements for the acquisition of the relevant shares’ – repayments from another company controlled by taxpayer of loans made by him – whether a ‘return of value’ denying relief – yes – appeal dismissed – Capital gains tax – rollover relief on reinvestment – timing of issue of shares

Citations:

[2005] UKSPC SPC00471

Links:

Bailii

Capital Gains Tax

Updated: 01 July 2022; Ref: scu.228784

Ellis v Norbury Hill Ltd: LT 20 Oct 2003

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 Gains Tax Act 1979 150

Capital Gains Tax

Updated: 30 June 2022; Ref: scu.225771

Faraday v Carmarthanshire County Council: LT 20 Oct 2003

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 150

Cited by:

Appeal fromFaraday v Carmarthenshire County Council CA 10-May-2004
The claimant appealed against an award of compensation on the compulsory acquisition of his land by the defendant.
Held: The award was incorrect. The authority had wrongly deducted a sum in respect of ‘freed up time’ – which would have allowed . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax, Capital Gains Tax

Updated: 30 June 2022; Ref: scu.225772

HM Inspector of Taxes v Hatt: LT 13 Nov 2001

LT CAPITAL GAINS TAX- s47(1) of Taxes Management Act 1970 – valuation of half-share in house and garden – value as a vacant house – comparables – evidential value of anonymised comparables – whether adjustment to reflect lettings – development value of rear garden – adjustment to reflect half share – whether sale prices disclosed to Inland Revenue for stamp duty purposes admissible as evidence with consent of Tribunal – Inland Revenue valuation confirmed.

Citations:

[2001] EWLands TMA – 207 – 2000

Links:

Bailii

Statutes:

Taxes Management Act 1970 47(1)

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 30 June 2022; Ref: scu.225687

Palmer v HM Inspector of Taxes: SCIT 22 Mar 2005

SCIT Capital Gains – Retirement Relief on the grounds of ill-health – incapable of engaging in work of a kind previously undertaken in the business and likely to remain permanently incapable – medical evidence did not support a finding of permanent incapacity – Appeal dismissed (Paragraph 3(1)(b), Schedule 6, Taxation of Chargeable Gains Act 1992).

Citations:

[2005] UKSPC SPC00467

Links:

Bailii

Statutes:

Taxation of Chargeable Gains Act 1992

Capital Gains Tax

Updated: 30 June 2022; Ref: scu.224959

Leedale (Inspector of Taxes) v Lewis: HL 14 Oct 1982

The statute called for the apportionment of capital gains made by non-resident trustees where resident beneficiaries had ‘interests’ in the settled property, with the apportionment to be made ‘in such manner as is just and reasonable between’ them. The persons in question only had discretionary interests in the settled property.
Held: Such discretionary beneficiaries did have ‘interests in settled property’ for the purposes of s 42(2) of the 1965 Act.
The House considered the argument that interpretation of a taxing statute might cause hardship.
Lord Scarman characterised the term ‘beneficiary’ as: ‘a term which everyone is agreed includes persons who are the objects of the discretionary trusts’.
Lord Wilberforce said: ‘I would only refer to one other argument, that based on the alleged ‘hardship’ of accepting the Revenue’s contention. I do not think that this is a relevant consideration at all. If there were two equally possible constructions of this subsection, it might be correct to choose that which is the more favourable to the taxpayer, on the basis that subjects can only be taxed by clear words. This principle cannot apply where there are decisive legal reasons for preferring one construction rather than another. Once this step has been taken considerations of ‘hardship’ do not enter into the discussion.’ and ‘Settlors, after 1965, make their settlements with knowledge of the legislation and of its consequences.’
. . And ‘The key question is as to the meaning of the word ‘interests’ in section 42(2) of the Finance Act 1965, the alternatives being whether this word refers only to such interests as can be assigned a value, or whether it is a word of more general significance capable of covering any interest, quantifiable or non-quantifiable, of a beneficiary under a trust. That either of these is a possible meaning in fiscal legislation is made clear (a) by the general observations of Lord Reid in Gartside v. Inland Revenue Commissioners [1968] A.C. 533 [sic], 603 (see also those of Stephen J. and Wills J. in Attorney-General v. Heywood (1887) 19 Q.B.D. 326) and (b) by a comparison of the cases just cited. In Heywood, which arose under section 38 of the Customs and Inland Revenue Act 1881, and where the question was whether the settlor had reserved ‘an interest’ by including himself among a discretionary class of beneficiaries, the word ‘interest’ was given the more general meaning. To require that it meant something to which an ascertainable value could be assigned would, it was held, be contrary to the scheme of the statute. In Gartside, on the other hand, which arose under section 43 of the Finance Act 1940, and where the question was whether estate duty would be charged in respect of the determination of a discretionary interest, this House held that the word must bear the narrower meaning because the statute necessarily required ascertainment of the quantum of the interest. In Gartside I expressed the opinion, from which the other members of the House did not dissent, that these two cases could stand together. The word ‘interest’ is one of uncertain meaning and it remains to be decided on the terms of the applicable statute which, or possibly what other, meaning the word may bear. The appellant contends for the narrower meaning, and can find some support in section 42 of the Act of 1965. There is the reference to ‘values’ in subsection (2). There is subsection (3) which, he contends, sets out a code for assigning values to discretionary interests in income or capital – an exclusive code within one of whose provisions a case must fall if a charge to tax in respect of a discretionary trust is to arise. There is, thirdly, the reference, in subsection (2), to a life interest or an interest in reversion, but, in my opinion this does not survive a first critical look: the reference is clearly illustrative and nothing more. The two main arguments are by no means negligible, but they are, in my opinion, greatly outweighed by those on the other side. I simply state them, as they impressed me; they are developed in discussion in the Court of Appeal’s judgment. 1. The initial words of subsection (2) are ‘any beneficiary’. Unless clearly directed otherwise, I would assume that ‘persons having interests’ was correlative to these words. Discretionary objects are clearly ‘beneficiaries’, so I would suppose them also to be included in ‘persons having interests.’ 2. The apportionment to be made under the subsection is mandatory. The amount of the gains – i.e., the whole amount – must be apportioned in the relevant year of assessment. This can only be done if discretionary objects, who may be the only ‘beneficiaries’ in that year, can be the objects of apportionment. 3. The words, in subsection (2), ‘in such manner as is just and reasonable’ and ‘as near as may be, according to the respective values of those interests’ suggest a broad rather than an actuarial approach in which all relevant considerations may be taken into account. They permit, inter alia, consideration of the settlor’s letter of intent which shows, at least, that the settlement was to be regarded as for the benefit of the grandchildren, not of the settlor’s two children. 4. That subsection (3) represents an exclusive code is in my opinion not supported by the form of the section. On the contrary, the structure of it suggests that subsection (2) is the main and general charging provision, subsection (3) being auxiliary and confined to particular cases. These considerations together convince me that an apportionment in respect of ‘interests’ under a discretionary trust can, indeed must, be made. ‘
HL Capital gains tax – Gains accruing to trustee resident outside the UK – UK – resident beneficiaries being both potential objects of discretionary power and having interests contingent on surviving to a specified day – Whether apportionment of gains amongst beneficiaries mandatory – Whether relevant to consider hardship – Manner of apportionment – Finance Act 1965, s 42.

Judges:

Lord Wilberforce, Lord Scarman, Lord Roskill and Lord Brandon

Citations:

[1982] 1 WLR 1319, [1982] 3 All ER 808, [1982] UKHL TC – 56 – 501

Links:

Bailii

Statutes:

Finance Act 1965 42(2)

Jurisdiction:

England and Wales

Cited by:

CitedTrennery v West (Inspector of Taxes) HL 27-Jan-2005
The House considered the application of the section to ‘flip-flop trusts’. The section allocated liability to charge on gains within a settlement under certain circumstances onto the settlor, and at his rate of tax. Assets were allocated to two . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax, Trusts

Updated: 29 June 2022; Ref: scu.222085

T and Another v HM Inspector of Taxes: SCIT 4 Nov 2004

SCIT CAPITAL GAINS TAX – retirement relief – whether appellants made material disposal for purposes of s.163 TCGA 1992 when they made gifts to their three children of interests in assets of farming partnership – if so, sale of certain building land was associated disposal for purposes of s.164 and appellants qualified for retirement relief – appeal allowed

Judges:

J David Demack

Citations:

[2004] UKSC SPC00438

Links:

Bailii

Capital Gains Tax

Updated: 28 June 2022; Ref: scu.221417

Mansworth (Inspector of Taxes) v Jelley: ChD 20 Mar 2002

The taxpayer had the benefit of option as an employee in his company scheme. He exercised the option and the issue arose as to when the base value of the options were to be valued for capital against tax purposes. The taxpayer argued that they were to be valued at the point where they were exercised, and since they were exercised at market value there would be no capital gain. The revenue contended that they were to be valued at the date they were issued, when they had a nil value.
Held: The taxpayer acquired the options by reason of his employment ‘otherwise than by way of bargain made at arm’s length’. Did this affect the means of valuating the underlying shares? It did. The taxpayer was correct.

Judges:

Mr Justice Lightman

Citations:

Times 24-Apr-2002, Gazette 23-May-2002

Statutes:

Taxation of Chargeable Gains Act 1992 28 17 38 144

Jurisdiction:

England and Wales

Citing:

Appeal ToMansworth (Inspector of Taxes) v Jelley CA 12-Dec-2002
A non-resident employee had been given share options exercisable at the price of the shares on the New York Stock Exchange at the date of the grant. The Inland Revenue appealed a decision that the option was to be valued as at the date of grant, . .

Cited by:

Appeal fromMansworth (Inspector of Taxes) v Jelley CA 12-Dec-2002
A non-resident employee had been given share options exercisable at the price of the shares on the New York Stock Exchange at the date of the grant. The Inland Revenue appealed a decision that the option was to be valued as at the date of grant, . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 28 June 2022; Ref: scu.170075

Davies (Inspector of Taxes) v Hicks: ChD 12 May 2005

The taxpayer use a bed and breakfast arrangement with a trust based in Mauritius, taking advantage of the double taxation agreement with that country. The shares were transferred into a discretionary trust. When the shares increased in value they were sold, and on that day the trustees retired, to be replaced by the trust company in Mauritius.
Held: At the time of the sale, the assets in the trust were cash, and exempt from capital gains tax. On the following day, the trust purchased equivalent shareholdings with the cash. Section 106A was purely computational, and could not be used by the revenue to translate the cash back into shares. It had to be used instead to match the shares acquired with those disposed on the next in first out basis. No chargeable gain was deemed to have accrued.

Judges:

Park J

Citations:

Times 27-May-2005

Statutes:

Taxation of Capital Gains Act 1992

Jurisdiction:

England and Wales

Citing:

Appeal fromHicks v Davies (HM Inspector of Taxes) SCIT 16-Nov-2004
. .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 27 June 2022; Ref: scu.225373

Jerome v Kelly (Inspector of Taxes): ChD 15 Apr 2002

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 acquired by the Bermudan Trustees.
Held: The provisions of s28 which deemed gains to have been acquired by others could not be used to hold a person being liable to gains tax on a gain which he did not make, and to leave other unconnected persons who had made a gain free of the tax.

Judges:

Mr Justice Park

Citations:

Times 19-Apr-2002

Statutes:

Taxation of Chargeable Gains Act 1992 28 60, Capital Gains Tax Act 1979 27(1)

Jurisdiction:

England and Wales

Citing:

Appealed toJerome v Kelly (HM Inspector of Taxes) CA 20-Dec-2002
The taxpayer had contracted for the disposal of land in three tranches. The later sales were by a Bahamian company to whom the land was assigned subject to the contract.
Held: The later sales were under the original contract. That contract . .

Cited by:

Appeal fromJerome v Kelly (HM Inspector of Taxes) CA 20-Dec-2002
The taxpayer had contracted for the disposal of land in three tranches. The later sales were by a Bahamian company to whom the land was assigned subject to the contract.
Held: The later sales were under the original contract. That contract . .
Lists of cited by and citing cases may be incomplete.

Commonwealth, Capital Gains Tax

Updated: 27 June 2022; Ref: scu.170065

Rank Xerox Ltd v Lane (Inspector of Taxes): HL 25 Oct 1979

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 WLR 594, [1979] TR 327, [1979] 3 All ER 657, [1980] RPC 385, [1981] AC 629, 53 TC 185, [1979] STC 740

Links:

Bailii

Statutes:

Finance Act 1965

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 27 June 2022; Ref: scu.559839

Weston v Revenue and Customs: FTTTx 16 Dec 2013

FTTTx CAPITAL GAINS TAX – negligible value claim – asset a certificate of deposit denominated in sterling in an overseas bank which accounted in US dollars – the bank went into administration and later liquidation and was the subject of a complaint by the Securities and Exchange Commission alleging fraud – whether asset was a debt denominated in sterling – held it was – whether the appellant’s claim in the liquidation in respect of the CD was a separate asset for CGT purposes – held it was not – appeal dismissed

Citations:

[2014] UKFTT 11 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 23 June 2022; Ref: scu.519585

Crabtree v Hinchcliffe (Inspector of Taxes): ChD 5 Dec 1969

The taxpayer owned shares in his own company, and was to sell them in a take-over. The sale was delayed. The Act required the base value to be set at the beginning of the tax year, and the chargeable gain was the increase in price when the sale eventually went through. As quoted stock, they were to be valued at the quoted price unless there were exeptional circumstances.
Held: The impending sale should have been disclosed to the shareholders generally. Had that happened, the price at the start of the tax year would have been greater, and the base price was set accordingly and the chargeable gain reduced accordingly. The inspector’s appeal from the Special Commissioners failed.

Judges:

Pennycuick J

Citations:

[1970] 1 All ER 1239, [1970] Ch 628

Statutes:

Finance Act 1965 44(3)

Jurisdiction:

England and Wales

Citing:

Appealed toHinchcliffe (Inspector of Taxes) v Crabtree CA 1971
The taxpayer’s shareholding was to be sold in a take-over. A sale was substantially agreed, but not completed for several months. The base value of the shares fell to be set by the quoted price at the start of the tax year. The take-over had not . .

Cited by:

Appeal fromHinchcliffe (Inspector of Taxes) v Crabtree CA 1971
The taxpayer’s shareholding was to be sold in a take-over. A sale was substantially agreed, but not completed for several months. The base value of the shares fell to be set by the quoted price at the start of the tax year. The take-over had not . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 21 June 2022; Ref: scu.215880

Marks v HM Inspector of Taxes: SCIT 8 Sep 2004

SCIT Income tax – loss relief – TA 1988 s 574 – whether allowable loss for capital gains tax purposes
Capital gains tax – whether shares becoming of negligible value – whether claim made – form of claim – whether date specified
Capital gains tax – whether share issue a bargain other than at arm’s length – whether a reorganisation
Jurisdiction – estoppel – whether available against Crown – conditions for claim based on ‘legitimate expectation’ – method of seeking remedies

Citations:

[2004] UKUKSPC SPC00428, [2004] STI 2259, [2004] STC (SCD) 503

Links:

Bailii

Income Tax, Capital Gains Tax

Updated: 21 June 2022; Ref: scu.213734

In re Lynall deceased: CA 1968

Harman LJ said: ‘The sale envisaged by the section is, as is agreed, not a real but a hypothetical sale, and must be taken to be a sale between a willing vendor and a willing purchaser: see, for instance, the speech of Lord Guest in In re Sutherland [ 1963] AC 235 , at page 262. It is true that the so-called willing vendor is a person who must sell: he cannot simply call off the sale if he does not like the price; but there must be on the other side a willing purchaser, so that the conditions of the sale must be such as to induce in him a willing frame of mind.’

Judges:

Harman LJ

Citations:

(1968) 47 TC 375

Statutes:

Finance Act 1894 7(5)

Jurisdiction:

England and Wales

Cited by:

Appeal fromLynall v Inland Revenue Commissioners HL 2-Jan-1971
The House was asked about the fixing of ‘price . . in the open market’ of a parcel of shares held in a private company. The Finance Act 1894 provided a method of valuation of property for estate duty purposes by reference to what the property would . .
CitedGrays Timber Products Ltd v Revenue and Customs SC 3-Feb-2010
An assessment to income tax had been raised after the employee resold shares in the company issued through the employees’ share scheme at a price which the Revenue said was above the share value. The company appealed against a finding that tax was . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 18 June 2022; Ref: scu.396611

Crabtree v Hinchcliffe (Inspector of Taxes): HL 27 Oct 1971

HL Capital gains tax – Market value at 6th April 1965 – Quoted shares – Takeover negotiations in progress – Negotiations not known to public – Whether in consequence of special circumstances quoted price not proper measure of market value – Finance Act 1965 (c. 25), s. 44.

Citations:

[1971] UKHL TC – 47 – 419

Links:

Bailii

Statutes:

Finance Act 1965 44

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 17 June 2022; Ref: scu.559817

Mansworth (Inspector of Taxes) v Jelley: CA 12 Dec 2002

A non-resident employee had been given share options exercisable at the price of the shares on the New York Stock Exchange at the date of the grant. The Inland Revenue appealed a decision that the option was to be valued as at the date of grant, rather than at the time it was exercised.
Held: Appeal dismissed. The Act provided for valuation at the date of the disposal of the asset. In this case the asset was the option, and it was to be valued at the date of the grant. The exercise of the option was not a disposal of it, but was to be treated as at one with the grant of the option.

Judges:

Kennedy, Chadwick, Jonathan Parker, LJJ

Citations:

Times 20-Dec-2002, Gazette 13-Mar-2003

Statutes:

Taxation of Chargeable Gains Act 1992 137

Jurisdiction:

England and Wales

Citing:

Appeal fromMansworth (Inspector of Taxes) v Jelley ChD 20-Mar-2002
The taxpayer had the benefit of option as an employee in his company scheme. He exercised the option and the issue arose as to when the base value of the options were to be valued for capital against tax purposes. The taxpayer argued that they were . .

Cited by:

Appeal ToMansworth (Inspector of Taxes) v Jelley ChD 20-Mar-2002
The taxpayer had the benefit of option as an employee in his company scheme. He exercised the option and the issue arose as to when the base value of the options were to be valued for capital against tax purposes. The taxpayer argued that they were . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 14 June 2022; Ref: scu.178602

Marks v HM Inspector of Taxes: SCIT 23 Jun 2004

SCIT CAPITAL GAINS TAX – valuation of shares – TCGA 1992 ss 35(2), 55(1), 272(1), (2), 273 – small unquoted company – nature of material hypothetical purchaser would take into account – approach to be adopted

Citations:

[2004] UK SPC00418

Links:

Bailii

Statutes:

Taxation of Chargeable Gains Act 1992 35(2) 55(1) 272(1) 273

Capital Gains Tax

Updated: 11 June 2022; Ref: scu.199215

Aberdeen Construction Group Ltd v Inland Revenue Commissioners: HL 1978

The House gave guidance on the interpretation of Tax statutes.
Held: The consideration at issue had been paid both for shares and for something else, the waiver of a loan the seller had made to the company. Lord Wilberforce emphasised the need to consider each asset disposed of separately in the light of the rules which apply to that particular asset.
TC Corporation tax – Chargeable gains – Disposal by holding company of its shares in subsidiary company on condition that holding company waived repayment of its loans to the subsidiary – Whether consideration given for shares alone or shares and loans – Whether the loans were debts on a security and an allowable loss accrued – Whether the amount o f the loans was an allowable deduction in computing the gain or loss on the disposal – Finance Act 1965 (c 25), Sch 7, para 11; Sch 6, paras 4(1) (b), 8.
Capital gains tax is a tax on gains, or gains less losses. It is not a tax on arithmetical differences. To say that a loss (or gain) which appears to arise at one stage in an indivisible process, and which is intended to be and is cancelled out by a later stage, so that at the end of what was bought as, and planned as, a single continuous operation, is not such a loss (or gain) as the legislation is dealing with is well, and indeed essentially, within the judicial function.

Judges:

Lord Wilberforce

Citations:

[1978] AC 885, [1978] UKHL TC – 52 – 281, [1978] 1 All ER 962, (1978) 52 Tax Cas 281

Links:

Bailii

Statutes:

Finance Act 1965

Jurisdiction:

England and Wales

Cited by:

CitedJerome v Kelly (Her Majesty’s Inspector of Taxes) HL 13-May-2004
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 . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax, Corporation Tax

Updated: 10 June 2022; Ref: scu.196889

Revenue and Customs v Warshaw: UTTC 23 Dec 2020

CAPITAL GAINS TAX – entrepreneurs’ relief – ‘personal company’ – whether a 10% cumulative preferential dividend which is compounded for unpaid dividends is a dividend ‘at a fixed rate’ – no, therefore shares carrying such rights are ordinary share capital – appeal dismissed

Citations:

[2020] UKUT 366 (TCC)

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 10 June 2022; Ref: scu.657045

Inwards v HM Inspector of Taxes: SCIT 16 Jun 2003

SCIT CAPITAL GAINS TAX – Reinvestment relief – Return of value – Acquisition by director of shares newly issued – andpound;375,000 paid for shares – Delay before issue – No contract although arrangement that payment was for shares – Debt to director until issue – Whether debt incurred ‘on’ acquisition – Whether TCGA s.164L covers debt itself incurred as part of arrangements for acquisition – Mischief rule – Appeal allowed

Citations:

[2003] UKSC SPC00371

Links:

Bailii

Capital Gains Tax

Updated: 10 June 2022; Ref: scu.195425

New Angel Court Ltd v Danny Adam (HM Inspector of Taxes): ChD 16 Mar 2004

The taxpayer company had acquired an asset from a company within the same group. It had been treated as trading stock. The inspector sought to deny transfer of the resulting trading loss between the companies.
Held: The claim and appeal was to be allowed. The properties if sold outside the group would have attracted loss relief, and the purpose of the transfer was in these circumstances not relevant. The Act looked to whether there was a trading purpose for the transfer. That issue was satisfied.

Judges:

Lord Justice May The Hon Mr Justice Parker Lord Phillips Of Worth Matravers, Mr

Citations:

[2004] EWCA Civ 242, Times 12-Apr-2004

Links:

Bailii

Statutes:

Taxation of Chargeable Gains Act 1992 173(1)

Jurisdiction:

England and Wales

Citing:

Appealed toNew Angel Court Ltd v Adam (Inspector of Taxes) ChD 25-Jul-2003
The taxpayer company employed a subsidiary company through which it conducted its trade in land. It then sought to represent the profits from that subsidiary within its own accounts as trading profits for corporation tax purposes. The commissioner . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 10 June 2022; Ref: scu.194583

Trennery v West (HM Inspector of Taxes) and Related Appeals: CA 18 Dec 2003

Judges:

Lord Justice Jonathan Parker Lord Justice Kennedy Lord Justice Longmore

Citations:

[2003] EWCA Civ 1792, [2004] STC 170, [2004] STI 51, [2004] BTC 3

Links:

Bailii

Statutes:

Taxation of Chargeable Gains Act 1992 77(2)

Jurisdiction:

England and Wales

Citing:

Appeal fromWest and Others (HM Inspector of Taxes) v Trennery and others ChD 1-Apr-2003
The taxpayers had adopted the ‘flip-flop’ scheme to reduce their Capital Gains Tax liability.
Held: The section was intended to prevent relief where the settlor retained some direct or indirect benefit. Derived property was defined to include . .

Cited by:

Appeal fromTrennery v West (Inspector of Taxes) HL 27-Jan-2005
The House considered the application of the section to ‘flip-flop trusts’. The section allocated liability to charge on gains within a settlement under certain circumstances onto the settlor, and at his rate of tax. Assets were allocated to two . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 08 June 2022; Ref: scu.189923

New Angel Court Ltd v Adam (Inspector of Taxes): ChD 25 Jul 2003

The taxpayer company employed a subsidiary company through which it conducted its trade in land. It then sought to represent the profits from that subsidiary within its own accounts as trading profits for corporation tax purposes. The commissioner viewed the arrangement as window dressing to maximise claims of expenditure against income.
Held: The rule required a company to show that the subsidiary had been acquired as trading stock, but any fiscal motive was irrelevant. A transaction might be ineffective where it was inexplicable save on fiscal grounds looked at as a whole. The asset had to be acquired in order to be sold in the normal course of trade and for profit. In the end it was a matter of fact for the commissioners. In this case they had directed themselves correctly in law, looking at the group as a whole. Appeal dismissed.

Judges:

Lawrence Collins J

Citations:

Times 08-Aug-2003, [2003] EWHC 1876 (Ch), Gazette 02-Oct-2003

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

CitedEdwards (Inspector of Taxes) v Bairstow HL 25-Jul-1955
The House was asked whether a particular transaction was ‘an adventure in the nature of trade’.
Held: Although the House accepted that this was ‘an inference of fact’, on the primary facts as found by the Commissioners ‘the true and only . .
CitedReed v Nova Securities Ltd 1985
In order to convert an allowable loss into a trading loss to secure a tax advantage, it was only necessary that there had to have been an acquisition by a trading company ‘as trading stock’ . .
CitedCoates v Arndale Properties Ltd 1984
A transaction might be so clearly inspired by fiscal considerations that its shape and character as a trading transaction would be insufficient to preserve its tax value as such. . .
CitedOverseas Containers (Finance Ltd) v Stoker 1989
A transaction must be looked at as a whole in order to establish whether it was a genuine trading transaction eligible for tax relief, or was an action engendered solely by fiscal motives. . .
CitedEnsign Tankers (Leasing) Ltd v Stokes (Inspector of Taxes) HL 6-May-1992
The appellants entered into partnerships with a film production company. By doing so they intended to make available to themselves first year allowances on the capital expenditure incurred. Loan agreements protected them from any eventual loss.

Cited by:

Appealed toNew Angel Court Ltd v Danny Adam (HM Inspector of Taxes) ChD 16-Mar-2004
The taxpayer company had acquired an asset from a company within the same group. It had been treated as trading stock. The inspector sought to deny transfer of the resulting trading loss between the companies.
Held: The claim and appeal was to . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Updated: 08 June 2022; Ref: scu.185839

Unilever (UK) Holdings Ltd v Smith (Inspector of Taxes): CA 11 Dec 2002

The company entered into an approved scheme of arrangement under which the entire preference shares were cancelled. The company appealed a refusal to recognise the arrangement as a re-organization of the company with a deemed disposal and re-acquisition of the holdings of the shares at market value.
Held: It was of the essence of a reorganization that there should be a new share-holding. None such had been created. The ordinary shares left were not a new holding, there was no acquisition, and the cancellation of the preference shares did not work to revalue the shareholdings.

Judges:

Lord Justice Auld, Lord Justice Clarke, Lord Justice Jonathon Parker

Citations:

Times 22-Jan-2003, [2002] EWCA Civ 1787

Links:

Bailii

Statutes:

Companies Act 1948 206, Taxation of Chargeable Gains Act 1992 126(1)

Jurisdiction:

England and Wales

Company, Capital Gains Tax

Updated: 06 June 2022; Ref: scu.178452

Melville and Others v Inland Revenue Commissioners: ChD 27 Jun 2000

A settlor created a common form discretionary trust save only that it included a right to require, after 90 days, the trustees to revest the settled fund in the settlor. A chargeable transfer was calculated at the reduction in value of his estate after the transfer. The clause meant that the sums remained ‘rights and interests of any description’ belonging to the settlor. The Revenue had not established that the statutory definition of property should not apply.

Citations:

Times 27-Jun-2000, Gazette 29-Jun-2000

Statutes:

Inheritance Tax Act 1984

Jurisdiction:

England and Wales

Cited by:

Appeal fromMelville and others v Commissioners of Inland Revenue CA 31-Jul-2001
The taxpayer, to minimize his tax, put assets into a discretionary trust. The trust included the right for him to give 90 days notice requiring the assets to be transferred to him absolutely. He successfully argued that the assets were no longer . .
Lists of cited by and citing cases may be incomplete.

Trusts, Inheritance Tax, Capital Gains Tax

Updated: 04 June 2022; Ref: scu.83617

Scott v Revenue and Customs: UTTC 17 Jul 2018

CGT – tax years 2006/07 and 2007/08 – corresponding deficiency relief under s. 539 ITTOIA 2005 – whether available to reduce rates of tax on chargeable gains when no income – construction and effect of ss. 4 and 6(2) TCGA 1992

Citations:

[2018] UKUT 236 (TCC), [2018] STC 1589

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 03 June 2022; Ref: scu.628086

Ames v The Commissioners for HM Revenue and Customs: UTTC 25 Jun 2018

CAPITAL GAINS TAX – Enterprise Investment Scheme – meaning of ‘attributable’ in section 150A(2) Taxation of Chargeable Gains Act 1992 – whether CGT exemption only available if EIS income tax relief claimed – JUDICIAL REVIEW – whether HMRC adopted flawed methodology in appraising taxpayer’s late claim for relief and exercising powers under section 5(1) Commissioners for Revenue and Customs Act 2005 – whether HMRC acted with conspicuous unfairness

Citations:

[2018] UKUT 190 (TCC), [2018] BTC 518, [2018] STI 1420, [2018] STC 1704

Links:

Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 03 June 2022; Ref: scu.628067

Garner v Pounds Shipowners and Shipbreakers Ltd and One Other Action: HL 18 May 2000

The taxpayers each paid a sum to a stakeholder for an option to purchase land. The sum was repayable if, restrictive covenants having been released, they decided not to exercise the option. On repayment they were taxed on the sum repaid. They claimed to set off the sums paid out for the release of the restrictive covenants, but this was not allowed, since they had been paid to a third party, and had not been incurred wholly exclusively and necessarily for the gain received.

Citations:

Gazette 08-Jun-2000, [2000] UKHL 30, [2000] 3 All ER 218, [2000] 1 WLR 1107, [2000] UKHL TC – 72 – 561

Links:

House of Lords, Bailii, Bailii

Jurisdiction:

England and Wales

Capital Gains Tax

Updated: 31 May 2022; Ref: scu.159064

Melville and others v Commissioners of Inland Revenue: CA 31 Jul 2001

The taxpayer, to minimize his tax, put assets into a discretionary trust. The trust included the right for him to give 90 days notice requiring the assets to be transferred to him absolutely. He successfully argued that the assets were no longer part of his estate, since that right was an asset in his estate. The revenue appealed. The sections defined his estate as ‘the aggregate of all property to which he is beneficially entitled’, and section 272 included rights and interests of any description. The right was valuable, and thus substantially reduced the value transferred into the trust fund, and therefore the tax payable on that transfer.

Judges:

Lord Justice Peter Gibson, Lady Justice Arden, Lord Justice Kay

Citations:

Gazette 27-Sep-2001, Times 09-Oct-2001, [2001] EWCA Civ 1247, (2001-02) 4 ITELR 231, [2001] STC 1271, [2001] NPC 132, 74 TC 372, [2001] STI 1106, [2001] WTLR 887, [2002] 1 WLR 407, [2001] BTC 8039

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 3(1) 5 272

Jurisdiction:

England and Wales

Citing:

Appeal fromMelville and Others v Inland Revenue Commissioners ChD 27-Jun-2000
A settlor created a common form discretionary trust save only that it included a right to require, after 90 days, the trustees to revest the settled fund in the settlor. A chargeable transfer was calculated at the reduction in value of his estate . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Capital Gains Tax, Trusts

Updated: 31 May 2022; Ref: scu.147653

Roger Stone (HM Inspector of Taxes) v Richard Henry Hitch; Thomas Henry Hitch and Ian Geoffrey Handy: CA 26 Jan 2001

The essence of whether a deed was a sham, was whether the deed proclaimed one set of intentions, but the parties acted out another. The deeds in this case were capable of being seen as a sham as respects one or more deeds in the combination of documents. The law did not require that every party to every deed forming part of the transaction trail should be a sham, but there must be a common intention that a deed should not take effect according to its tenor.

Judges:

Arden LJ

Citations:

Times 21-Feb-2001, Gazette 01-Mar-2001, [2001] EWCA Civ 1224

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Appeal fromHitch and Others v Stone (Inspector of Taxes) ChD 7-Apr-1999
A tax avoidance scheme was effective despite being complex and artificial. The documents affected third party rights in potential development land, and it was impossible to conclude it was a sham. . .
See AlsoStone (HM Inspector of Taxes) v Hitch and others CA 26-Jan-2001
As an exception to the general rule, it is not invariably necessary to show, in relation to multi party transactions, that every party to it knew it was a sham.
Arden LJ said: ‘Third, the fact that the act or document is uncommercial, or even . .

Cited by:

CitedRegina v Stannard CACD 1-Nov-2005
The defendant had been convicted of offences in which he had operated to purchase companies and use false debentures to evade corporation tax. Compensation had been sought under the 1988 Act. It was argued that the confiscation order should be . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax, Taxes Management

Updated: 31 May 2022; Ref: scu.147411