Andrew Berry v Revenue & Customs [2009] UKFTT 386 (TC) (29 December 2009)

Andrew Berry v Revenue & Customs [2009] UKFTT 386 (TC) (29 December 2009)

The tribunal held that, viewed realistically and purposively, the Gilt Strip Planning did not result in any real loss to Mr Berry as required by paragraph 14A Schedule 13 FA 1996. The transactions were a single preordained scheme designed to create a tax loss without economic substance. The option premium was part of the overall arrangement and should be included in the computation, resulting in no allowable loss. Thus, the appeal was dismissed.

Citation
[2009] UKFTT 386
Parties
Appellant: Andrew Berry; Respondents: The Commissioners for Her Majesty’s Revenue and Customs (Income Tax)
Jurisdiction
United Kingdom
Judgment Date
29 December 2009
Procedural Posture
Appeal / First Tier Tribunal (tax) Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Corporation Tax, Tax Avoidance, Gilt Strips, Relevant Discounted Securities, Anti Avoidance, Loss Relief
Tax Law Income Tax Corporation Tax Tax Avoidance Gilt Strips Relevant Discounted Securities Anti Avoidance Loss Relief

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Parties

Andrew Berry

Appellant

The Commissioners for Her Majesty’s Revenue and Customs (Income Tax)

Respondents

Procedural Posture

Appeal / First Tier Tribunal (tax) Decision

Legal Issues

  1. 1 Whether the appellant sustained an income tax loss under paragraph 14A Schedule 13 Finance Act 1996 by virtue of entering into the Gilt Strip Planning scheme.
  2. 2 Whether the option price should be included in determining the amount payable on the taxpayer’s transfer of the gilt strip.

Ratio Decidendi

The tribunal held that, viewed realistically and purposively, the Gilt Strip Planning did not result in any real loss to Mr Berry as required by paragraph 14A Schedule 13 FA 1996. The transactions were a single preordained scheme designed to create a tax loss without economic substance. The option premium was part of the overall arrangement and should be included in the computation, resulting in no allowable loss. Thus, the appeal was dismissed.

Court Disposition

Appeal dismissed