Harding v HM Revenue & Customs

Harding v HM Revenue & Customs

A loan note which, at any time, contains a provision for conversion into or redemption in a currency other than sterling, even if that provision has lapsed by the date of disposal, does not satisfy the QCB condition in section 117(1)(b) of the Taxation of Chargeable Gains Act 1992. The lapse of the option does not effect a non-transactional change of status to a QCB, and accrued gains do not escape taxation as a result.

Parties
Appellant: Nicholas John Harding; Respondents: The Commissioners of Her Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
30 January 2008
Procedural Posture
Tax Appeal / Appeal From Special Commissioner to High Court
Outcome
Appeal dismissed
Legal Topics
Capital Gains Tax, Qualifying Corporate Bonds, Statutory Interpretation
Tax Law Capital Gains Tax Qualifying Corporate Bonds Statutory Interpretation

Case Brief

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Parties

Nicholas John Harding

Appellant

The Commissioners of Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / Appeal From Special Commissioner to High Court

Legal Issues

  1. 1 Whether loan notes with a lapsed currency conversion option qualify as qualifying corporate bonds (QCBs) under section 117(1)(b) of the Taxation of Chargeable Gains Act 1992 at the time of redemption
  2. 2 Whether the lapse of a currency conversion option constitutes a non-transactional change of status for QCB purposes

Ratio Decidendi

A loan note which, at any time, contains a provision for conversion into or redemption in a currency other than sterling, even if that provision has lapsed by the date of disposal, does not satisfy the QCB condition in section 117(1)(b) of the Taxation of Chargeable Gains Act 1992. The lapse of the option does not effect a non-transactional change of status to a QCB, and accrued gains do not escape taxation as a result.

Court Disposition

Appeal dismissed

Orders

  • The appeal is dismissed.