Thursday 7th July 2022
This is a second appeal. By appellant’s notice filed on 13 July 2021, the taxpayer appeals, with the permission of Upper Tribunal Judges Michael Green J and Judge Andrew Scott, their decision of 11 February 2021, whereby they allowed HMRC’s appeal against the First-tier Tribunal’s decision.
The appeal concerned a point regarding the availability of a capital gains tax relief to trustees of an interest in possession trust where the trustees dispose of shares in a company held by the trust. The relief is entrepreneurs’ relief pursuant to Chapter 3 of Part 5 of the Taxation of Chargeable Gains Act 1992.
The particular question related to whether the beneficiary under the settlements in question had to have an interest in possession throughout the period of 1 year. The FTT held against HMRC that the qualifying beneficiary only has to hold an interest in possession under the trust at the time of the trustee’s disposal of the shares.