Hadfield v Revenue & Customs [2010] UKFTT 261 (TC) (10 June 2010)

Hadfield v Revenue & Customs [2010] UKFTT 261 (TC) (10 June 2010)

Mr Hadfield did not become absolutely entitled to the shares until he accepted the exchange offer and the shares were allocated to him in July 2005. The Declaration of Trust did not confer absolute beneficial ownership prior to that date. There was no 'issue' of shares to Mr Hadfield in the circumstances required for section 135 TCGA relief. HMRC was correct to treat the transaction as a disposal for CGT purposes and to deny section 135 relief.

Citation
[2010] UKFTT 261 (TC)
Parties
Appellant: Peter Hadfield; Respondents: The Commissioners for Her Majesty’s Revenue and Customs (Capital Gains Tax)
Jurisdiction
United Kingdom
Judgment Date
10 June 2010
Procedural Posture
Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed
Legal Topics
Capital Gains Tax, Share for Share Exchange, Computation of Gain, TCGA 1992 S.135 Relief
Tax Law Capital Gains Tax Share for Share Exchange Computation of Gain TCGA 1992 S.135 Relief

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Parties

Peter Hadfield

Appellant

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

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether consideration shares had already been acquired by taxpayer prior to exchange
  2. 2 Whether relief under TCGA 1992 s.135 was available

Ratio Decidendi

Mr Hadfield did not become absolutely entitled to the shares until he accepted the exchange offer and the shares were allocated to him in July 2005. The Declaration of Trust did not confer absolute beneficial ownership prior to that date. There was no 'issue' of shares to Mr Hadfield in the circumstances required for section 135 TCGA relief. HMRC was correct to treat the transaction as a disposal for CGT purposes and to deny section 135 relief.

Court Disposition

Appeal dismissed