Robson v Mitchell (HM Inspector of Taxes): CA 18 May 2005

The company had taken out a loan to finance works on the farm. The loan was guaranted by the taxpayer. Years later when the farm was sold, part of the money was used to repay the loan, and the taxpayer sought to set it off against his liability for Capital Gains Tax.
Held: the taxpayer as guarantor was entitled to set the cost of the loan off against his tax only if he could show that it had been used entirely for the qualifying purpose of a business carried on by the company. In fact there had been no documentation to show how the money was used. The burden was on the taxpayer to establish entitlement. In the complete absence of any documentation, he had failed to satisfy that burden, and could not claim the relief.

Auld, Jonathan Parker, Neuberger LJJ
[2005] EWCA Civ 585
Taxation of Chargeable Gains Act 1992 253(1)
England and Wales
Appeal fromDavid Robson v Eric Mitchell (HM Inspector of Taxes) ChD 8-Jul-2004
The taxpayer sought capital gains tax relief of a loan to a business.
Held: To succeed in his claim the taxpayer had to establish that the indebtedness created was to be used entirely to serve the borrower’s business. . .
CitedStrong and Co of Romsey Ltd v Woodifield HL 30-Jul-1906
The company sought to deduct from its trading profits a sum expended paying damages for personal injuries to a visitor to the taxpayer’s Inn. The claim had been rejected.
Held: The company’s appeal failed. Lord Davey said: ‘I think that the . .

Lists of cited by and citing cases may be incomplete.

Capital Gains Tax

Leading Case

Updated: 01 November 2021; Ref: scu.224945