Kerrison v Revenue and Customs Commissioners

Income tax – Loss relief. Applying a purposive construction to s 30(9) of the Taxation of Chargeable Gains Act 1992, properly interpolated into s 30(1) of that Act, it was necessary to enquire, where a scheme involved more than one acquisition, by which acquisition the scheme purported to achieve its aim of creating an increase (or decrease) in the value of the asset. The Upper Tribunal (Tax and Chancery Chamber) held that, understood that way, in the present appeal, the aim of the scheme had been to create an increase in value of the shares via the disposal to an unconnected company at par and the acquisition from that company at a greatly increased price. Accordingly, the tribunal dismissed the taxpayer's appeal against the decision of the First-tier Tribunal (Tax Chamber) to uphold the rejection by the Revenue and Customs Commissioners of the relief claimed in relation to a capital loss the taxpayer claimed to have suffered as a result of a scheme he had entered into. The tribunal also dismissed HMRC's cross-appeal in relation to a loan waiver issue.

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