A fairly clear lesson in the need to be conversant with the legislation and HMRC practice and to ensure that one’s ‘ducks are lined up’ before any major event or tax trigger point, despite several ingenious arguments in the trusts defence.
In Trustees of the Peter Buckley Settlement v HMRC, 2024 (TC09022), the First-tier Tax Tribunal (FTT) rejected a trust’s application for entrepreneurs’ relief from capital gains tax on a share disposal because the relevant shares were not personally owned by the qualifying beneficiary for the required period. It accepted HMRC’s argument that entrepreneur’s relief (now effectively known as business asset disposal relief) was allowable only if the beneficiary held 5 per cent of the shares in his own right for one year within the three years before the disposal. However, the only share had been held by the settlement and not the beneficiary personally as required by TCGA 1992 bs 169(3).
The full case report may be found at:
https://financeandtax.decisions.tribunals.gov.uk//judgmentfiles/j12930/TC%2009022.pdf
Stephen Parnham
January 2024
