Pike v Revenue & Customs (Rev 1) [2011] UKFTT 289 (TC) (04 May 2011)

Pike v Revenue & Customs (Rev 1) [2011] UKFTT 289 (TC) (04 May 2011)

The sum payable on redemption of the loan stock, calculated as 7.25% per annum accruing daily, was 'interest' within the ordinary and statutory meaning, even though not paid periodically. Therefore, it must be disregarded in determining whether the security was a relevant discounted security. As a result, the security was not an RDS and no loss relief was available under Schedule 13 Finance Act 1996.

Citation
[2011] UKFTT 289
Parties
Appellant: Nicholas Pike; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
04 May 2011
Procedural Posture
Tax Appeal (first Tier Tribunal, Tax Chamber) / Decision on Appeal Against Closure Notice and Amendment to Self Assessment Tax Return
Outcome
Appeal dismissed
Legal Topics
Income Tax, Corporation Tax, Relevant Discounted Securities, Loss Relief, Statutory Interpretation, Tax Avoidance
Tax Law Income Tax Corporation Tax Relevant Discounted Securities Loss Relief Statutory Interpretation Tax Avoidance

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Parties

Nicholas Pike

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal (first Tier Tribunal, Tax Chamber) / Decision on Appeal Against Closure Notice and Amendment to Self Assessment Tax Return

Legal Issues

  1. 1 Whether the loan stock issued to Mr Pike constituted a 'relevant discounted security' (RDS) under Schedule 13 Finance Act 1996
  2. 2 Whether the sum payable on redemption (7.25% per annum accruing daily) was 'interest' for the purposes of the legislation
  3. 3 Whether loss relief could be claimed on the transfer of the security to a connected trust

Ratio Decidendi

The sum payable on redemption of the loan stock, calculated as 7.25% per annum accruing daily, was 'interest' within the ordinary and statutory meaning, even though not paid periodically. Therefore, it must be disregarded in determining whether the security was a relevant discounted security. As a result, the security was not an RDS and no loss relief was available under Schedule 13 Finance Act 1996.

Court Disposition

Appeal dismissed