HMRC v A and T L Hancock

In HMRC v A and T L Hancock [2016] UKUT 81 (18 February 2016) the UT found that the redemption of loan notes had triggered a charge to CGT.

Mr and Mrs Hancock had sold the entire share capital of their company Blubeckers Ltd to another company and the consideration had consisted in loan notes issued by the purchasing company.

The loan notes provided for a repayment in US dollars and at an exchange rate other than the one prevailing at the date of redemption. It was therefore agreed that they were not qualifying corporate bonds (QCBs) for the purpose of TCGA 1992 s 117. The sale agreement also included provision for further consideration depending on the subsequent performance of Blubeckers Ltd. The couple received further loan notes under this provision. These further notes initially also included a provision enabling the noteholders to require repayment in US...