Scott v HM Revenue and Customs

Scott v HM Revenue and Customs

Section 6(2) of the Taxation of Chargeable Gains Act 1992 does not permit CDR to reduce total income below zero for the purposes of calculating CGT liability. Once total income is reduced to nil, no further relief is available, and the basic rate band is not extended by the full amount of CDR. The statutory language does not support the appellant's construction, and there is no indication that Parliament intended CDR to operate as a relief from CGT in addition to income tax.

Parties
Appellant: Andrew Scott; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
22 January 2020
Procedural Posture
Civil Appeal Taxation / Appeal From Upper Tribunal (tax and Chancery Chamber) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Capital Gains Tax, Income Tax, Corresponding Deficiency Relief, Statutory Interpretation
Tax Law Capital Gains Tax Income Tax Corresponding Deficiency Relief Statutory Interpretation

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Parties

Andrew Scott

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Civil Appeal Taxation / Appeal From Upper Tribunal (tax and Chancery Chamber) to Court of Appeal

Legal Issues

  1. 1 Whether corresponding deficiency relief (CDR) can reduce the rate of capital gains tax (CGT) payable on chargeable gains in the same year of assessment beyond reducing total income to zero
  2. 2 Proper construction of section 6(2) of the Taxation of Chargeable Gains Act 1992 in relation to CDR

Ratio Decidendi

Section 6(2) of the Taxation of Chargeable Gains Act 1992 does not permit CDR to reduce total income below zero for the purposes of calculating CGT liability. Once total income is reduced to nil, no further relief is available, and the basic rate band is not extended by the full amount of CDR. The statutory language does not support the appellant's construction, and there is no indication that Parliament intended CDR to operate as a relief from CGT in addition to income tax.

Court Disposition

Appeal dismissed