David Harper v Commissioners for Her Majesty's Revenue and Customs
Decision date: 29 December 2009
Neutral citation: [2009] UKFTT 382 (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 in HMS President (1918) Ltd “became of negligible value” by 5 April 2004 for loss-relief purposes. The First-tier Tribunal found the taxpayer failed to prove the shares had any positive value when subscribed in June 2002 and December 2003, preferring HMRC's valuer and contemporaneous accounts over optimistic projections. The Tribunal concluded the shares had always been of negligible value and dismissed the appeal (apart from a small admitted £610).
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 taxpayer bears the burden of proving that shares had positive value at the relevant acquisition dates when claiming they later became of negligible value; valuations must be supported by reliable contemporaneous evidence (e.g. management accounts, balance sheets, independent inspections), and optimistic projection-based valuations unsupported by such records may be rejected.
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 judgment suggests (but does not lay down a binding rule) that, absent statutory definition, “negligible value” may be treated as meaning “worth next to nothing,” and that pre-purchase reports relying solely on seller-provided information without independent inspection may attract limited weight.