Farzad Fard v Commissioners for Her Majesty's Revenue and Customs
Decision date: 18 January 2011
Neutral citation: [2011] UKFTT 63 (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 appeal concerned whether shares transferred within a family qualified as "subscribed for" by the taxpayer so as to attract capital loss relief, and challenged HMRC's pre-check repayment practice and recovery/interest treatment. The Tribunal found the 66,668 shares had been issued to the appellant's father and later transferred by family transaction without involvement of the company, so they were not "subscribed for" by the appellant and the larger loss claim was disallowed. The appeal was dismissed; only a small loss for shares actually subscribed for was allowable, and HMRC's recovery of the excess repayments stands.
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: high
The decision indicates that, for ICTA loss relief, shares must have been "subscribed for" by the claimant — i.e. issued to him by the company in consideration of money or money's worth — and a subsequent intra-family transfer that does not involve the company does not convert those shares into ones subscribed for by the transferee.
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: high
The Tribunal strongly criticised HMRC's practice of making repayments before completing checks, recommending a high-level review of that "process now check later" approach and urging HMRC to negotiate repayment terms and consider waiving interest where its practices contributed to the taxpayer's position.