Professor Sir Peter Lachmann Lady Lachmann v Commissioners for Her Majesty's Revenue and Customs

Decision date: 10 November 2010

Neutral citation: [2010] UKFTT 560 (TC)

Overall AI summary confidence: medium

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Short overview

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AI confidence in this short overview: medium

This appeal concerned whether disposals of Inflazyme shares qualified for income tax loss relief under ICTA s574 given a prior s127 TGCA share‑for‑share exchange and Inflazyme's place of business, and whether HMRC's change of reasoning during an enquiry was a time‑barred new enquiry. The tribunal held Inflazyme had not carried on its business in the UK throughout the relevant period, so s574 relief was not available, and that HMRC did not commence a new, out‑of‑time enquiry by raising the place‑of‑business point. The appeal was dismissed and the closure notices upheld.

Ratio decidendi

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AI confidence in this ratio decidendi summary: medium

Where s127 TGCA treats original and replacement shares as the same asset, the relevant company's carrying on business during the statutory period determines whether disposals qualify under ICTA s574; and an enquiry into a loss relief claim can properly examine all interrelated statutory conditions, so a subsequent change in the specific legal rationale does not necessarily amount to a new, time‑barred enquiry if the issue was within the scope of the original enquiry.

Obiter dicta

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AI confidence in this obiter dicta summary: medium

The tribunal indicated that, had the appellants received cash in 2004 for the original Adprotech shares rather than shares in the exchange, relief might more likely have been available despite co‑ownership. The tribunal also expressed sympathy about delay and interest but noted it had no power to grant interest relief.

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