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Fanning v HMRC

In O Fanning v HMRC [2022] UKUT 21 (TCC) (21 January 2022) the Upper Tribunal (UT) found that a call option granted by the taxpayer was not an ‘other transaction’ falling within FA 2003 s 45(1)(b) as that section applied at the time of the transaction. The option holder obtained no entitlement to a conveyance and the scheme failed. 

Mr Fanning acquired a residential property in 2011 from an unrelated vendor for £5m via a sub-sale scheme. At the same time as the contract for the acquisition of the property was completed Mr Fanning granted a call option to San Leon Energy plc (San Leon) for £100 under which San Leon could buy the property for a market value consideration at a later date. 

The First-tier Tribunal (FTT) found that the scheme failed because the grant of the option (the secondary contract for the purposes of FA 2003 s 45(1)(b)) was...

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