Snell v HM Revenue & Customs

Snell v HM Revenue & Customs

The share exchange was effected for bona fide commercial reasons, but it was also part of a scheme whose main purpose was the avoidance of liability to capital gains tax by becoming non-resident before redeeming the loan stock. Therefore, s.137 TCGA 1992 precluded the application of ss.135 and 127-131, and Mr Snell was liable for capital gains tax on the transaction.

Parties
Appellant: Vincent Snell; Respondents: The Commissioners for Her Majesty's Revenue & Customs
Jurisdiction
England and Wales
Judgment Date
21 December 2006
Procedural Posture
Tax Appeal / High Court Appeal From Special Commissioners
Outcome
Appeal and cross-appeal dismissed
Legal Topics
Capital Gains Tax, Tax Avoidance, Share Exchange, Non Residency and Tax Liability
Tax Law Capital Gains Tax Tax Avoidance Share Exchange Non Residency and Tax Liability

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 6 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Vincent Snell

Appellant

The Commissioners for Her Majesty's Revenue & Customs

Respondents

Procedural Posture

Tax Appeal / High Court Appeal From Special Commissioners

Legal Issues

  1. 1 Whether the share exchange was effected for bona fide commercial reasons under s.137 TCGA 1992
  2. 2 Whether the exchange formed part of a scheme or arrangements of which the main purpose, or one of the main purposes, was avoidance of liability to capital gains tax

Ratio Decidendi

The share exchange was effected for bona fide commercial reasons, but it was also part of a scheme whose main purpose was the avoidance of liability to capital gains tax by becoming non-resident before redeeming the loan stock. Therefore, s.137 TCGA 1992 precluded the application of ss.135 and 127-131, and Mr Snell was liable for capital gains tax on the transaction.

Court Disposition

Appeal and cross-appeal dismissed

Orders

  • Mr Snell is liable for capital gains tax on the transaction in the sum assessed by HMRC
  • No relief under ss.135 and 127-131 TCGA 1992 is available to Mr Snell