Wayne Bottomer v The Commissioners for HMRC
Decision date: 20 October 2023
Neutral citation: [2023] UKFTT 893 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This case concerned whether £31,906.50 paid to an introducer/participant (SB and his wife) as a 50% share of profit on a renovated-and-sold property could be deducted from the appellants' chargeable gain under s.38 TCGA. The First-tier Tribunal found the payments were not expenditure "on" the asset reflected in its state or nature at disposal and were not fees/commission/remuneration for the professional services of a listed agent or similar under s.38(2). The claimed deduction was disallowed; procedural matters on final figures were reserved.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The Tribunal treated the governing legal propositions as: (1) s.38(1)(b) requires expenditure to be expenditure on the asset and reflected in the asset’s state or nature at disposal to qualify as acquisition or enhancement expenditure; and (2) s.38(2) confines allowable incidental costs to fees, commission or remuneration for the professional services of specified categories (eg agents), so a profit-share paid to a non‑professional introducer/participant does not fall within that provision and is not deductible.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal observed (obiter) that variable payments directly linked to consideration (for example estate agent commission) can constitute fees or remuneration, but that observation does not mean all variable, profit‑based payments qualify. It also noted that, in joint ownership, one co‑owner’s negotiations can bind the other where authority is implied.