Bretten v Revenue & Customs [2013] UKFTT 189 (TC) (14 March 2013)

Bretten v Revenue & Customs [2013] UKFTT 189 (TC) (14 March 2013)

The Tribunal held that the loss claimed by the appellant was not a real commercial loss as envisaged by Parliament in paragraph 2 of Schedule 13 FA 1996, but a planned loss arising from a pre-ordained tax avoidance scheme. The figures for the loss calculation must reflect commercial reality, and the amount 'paid' for the securities was not the face value but their true market value after 14 days. The anti-avoidance provision did not apply as OCL was not connected, but the appeal was dismissed as no real loss was sustained.

Citation
[2013] UKFTT 189
Parties
Appellant: George Rex Bretten QC; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
14 March 2013
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax) Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Corporation Tax, Anti Avoidance, Relevant Discounted Securities, Tax Loss Relief, Connected Persons, Statutory Construction
Tax Law Income Tax Corporation Tax Anti Avoidance Relevant Discounted Securities Tax Loss Relief Connected Persons Statutory Construction

Case Brief

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Parties

George Rex Bretten QC

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax) Decision

Legal Issues

  1. 1 Whether the appellant sustained a real loss from the discount on relevant discounted securities under Schedule 13 FA 1996
  2. 2 Whether the anti-avoidance provisions of paragraph 9A of Schedule 13 applied to deny the loss relief
  3. 3 Whether the amount paid by the appellant was the value of the securities after 14 days or at issue

Ratio Decidendi

The Tribunal held that the loss claimed by the appellant was not a real commercial loss as envisaged by Parliament in paragraph 2 of Schedule 13 FA 1996, but a planned loss arising from a pre-ordained tax avoidance scheme. The figures for the loss calculation must reflect commercial reality, and the amount 'paid' for the securities was not the face value but their true market value after 14 days. The anti-avoidance provision did not apply as OCL was not connected, but the appeal was dismissed as no real loss was sustained.

Court Disposition

Appeal dismissed

Orders

  • The amendment to the appellant’s self assessment tax return stands; no loss relief is available.