Morrison v HM Revenue and Customs [2014] ScotCS CSIH_113 (23 December 2014)

Morrison v HM Revenue and Customs [2014] ScotCS CSIH_113 (23 December 2014)

The appellant's payment in settlement of the action constituted a contingent liability in respect of representations made on the disposal of his shares, falling within section 49(1)(c) of the Taxation of Chargeable Gains Act 1992. The statutory language does not require the liability to be directly related to the value of the consideration or to depend on the capacity in which the representation was made. The payment reduced the gain realised on disposal, and the requirements for adjustment under section 49(2) were met.

Citation
[2014] ScotCS CSIH_113
Parties
Appellant: Sir Fraser Morrison; Respondents: The Commissioners for HM Revenue and Customs
Jurisdiction
Scotland
Judgment Date
23 December 2014
Procedural Posture
Appeal From Upper Tribunal Tax and Chancery Chamber / Appeal Judgment and Remittal to First Tier Tribunal
Outcome
Appeal allowed; case remitted to First Tier Tribunal for quantification of the settlement payment attributable to the relevant contingent liability.
Legal Topics
Capital Gains Tax, Contingent Liability, Statutory Interpretation, Tax Computation
Tax Law Capital Gains Tax Contingent Liability Statutory Interpretation Tax Computation

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 7 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Sir Fraser Morrison

Appellant

The Commissioners for HM Revenue and Customs

Respondents

Procedural Posture

Appeal From Upper Tribunal Tax and Chancery Chamber / Appeal Judgment and Remittal to First Tier Tribunal

Legal Issues

  1. 1 Whether a settlement payment made by the appellant was a contingent liability in respect of representations made on a disposal by way of sale of shares within the meaning of section 49(1)(c) of the Taxation of Chargeable Gains Act 1992, entitling the appellant to an adjustment of capital gains tax liability under section 49(2).

Ratio Decidendi

The appellant's payment in settlement of the action constituted a contingent liability in respect of representations made on the disposal of his shares, falling within section 49(1)(c) of the Taxation of Chargeable Gains Act 1992. The statutory language does not require the liability to be directly related to the value of the consideration or to depend on the capacity in which the representation was made. The payment reduced the gain realised on disposal, and the requirements for adjustment under section 49(2) were met.

Court Disposition

Appeal allowed; case remitted to First Tier Tribunal for quantification of the settlement payment attributable to the relevant contingent liability.

Orders

  • Appeal allowed.
  • Case remitted to the First Tier Tribunal to determine what part of the £12 million settlement payment was attributable to representations giving rise to the contingent liability under section 49(1)(c).