Robert Ames v The Commissioners for HMRC

Robert Ames v The Commissioners for HMRC

The CGT exemption under section 150A(2) TCGA requires that EIS income tax relief has actually been claimed and given, resulting in a reduction of income tax liability; mere eligibility is insufficient. HMRC's refusal to admit Mr Ames' late claim was based on a flawed methodology by failing to consider the full scope of its discretion and relevant guidance, requiring reconsideration.

Parties
Appellant/claimant: Robert Ames; Respondent/defendant: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
25 June 2018
Procedural Posture
Judicial Review and Tax Appeal / Appeal From First Tier Tribunal and Judicial Review
Outcome
Appeal dismissed; judicial review granted in part
Legal Topics
Enterprise Investment Scheme, Capital Gains Tax Exemption, Late Claim for Tax Relief, Statutory Interpretation, Judicial Review, Discretionary Powers of HMRC
Tax Law Administrative Law Enterprise Investment Scheme Capital Gains Tax Exemption Late Claim for Tax Relief Statutory Interpretation Judicial Review Discretionary Powers of HMRC

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Parties

Robert Ames

Appellant/claimant

The Commissioners for Her Majesty’s Revenue and Customs

Respondent/defendant

Procedural Posture

Judicial Review and Tax Appeal / Appeal From First Tier Tribunal and Judicial Review

Legal Issues

  1. 1 Interpretation of 'attributable' in section 150A(2) Taxation of Chargeable Gains Act 1992
  2. 2 Whether CGT exemption under EIS requires actual claim for income tax relief
  3. 3 Whether HMRC adopted flawed methodology in appraising late claim for relief

Ratio Decidendi

The CGT exemption under section 150A(2) TCGA requires that EIS income tax relief has actually been claimed and given, resulting in a reduction of income tax liability; mere eligibility is insufficient. HMRC's refusal to admit Mr Ames' late claim was based on a flawed methodology by failing to consider the full scope of its discretion and relevant guidance, requiring reconsideration.

Court Disposition

Appeal dismissed; judicial review granted in part

Orders

  • Mr Ames' appeal against the FTT's decision is dismissed.
  • HMRC's decision of 5 October 2015 refusing the late claim is quashed and remitted for reconsideration in light of this judgment.