Atherley v Revenue & Customs (CAPITAL GAINS TAX/TAXATION OF CHARGEABLE GAINS : Exemptions and reliefs) [2018] UKFTT 408 (TC) (23 July 2018)

Atherley v Revenue & Customs (CAPITAL GAINS TAX/TAXATION OF CHARGEABLE GAINS : Exemptions and reliefs) [2018] UKFTT 408 (TC) (23 July 2018)

There was objective evidence that £350,000 of the principal amount of the loan was irrecoverable in January 2013, and section 253(3) TCGA 1992 allows for a partial write-off to be treated as an allowable loss. Section 253(12) does not apply as there was no act or arrangement artificially preventing repayment. The...

Source-derived case information.

Citation
[2018] UKFTT 408
Parties
Appellant: Douglas Atherley; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
23 July 2018
Procedural Posture
Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal allowed in full
Legal Topics
Capital Gains Tax, Taxation of Chargeable Gains, Exemptions and Reliefs, Allowable Losses, Loans to Traders
Tax Law Capital Gains Tax Taxation of Chargeable Gains Exemptions and Reliefs Allowable Losses Loans to Traders

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Parties

Douglas Atherley

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether writing off part of a qualifying loan created an allowable loss under section 253(3) TCGA 1992
  2. 2 Whether section 253(12) TCGA 1992 applies to deny the allowable loss
  3. 3 Whether an unrealistic hope that the balance of the loan would be repaid affects the objective assessment that the part written off was irrecoverable

Ratio Decidendi

There was objective evidence that £350,000 of the principal amount of the loan was irrecoverable in January 2013, and section 253(3) TCGA 1992 allows for a partial write-off to be treated as an allowable loss. Section 253(12) does not apply as there was no act or arrangement artificially preventing repayment. The appeal is allowed in full.

Court Disposition

Appeal allowed in full

Orders

  • The appellant is entitled to claim an allowable loss equal to the irrecoverable amount of principal on the loan written off (£350,000).