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Ian Branagan v HMRC

In Ian Branagan v HMRC [2014] UKFTT 1100 (16 December 2014) the FTT found that a company had not been carrying on a qualifying trade.

The issue was whether income tax relief under ICTA 1988 s 574 applied to a disposal of shares deemed to have been of ‘negligible value’. This depended on whether the company was a ‘qualifying trading company’. The key point was whether the company’s trade was ‘money lending … or other financial activities’.

This in turn depended on whether the company had entered the mortgage market in its own right or had licensed the IP rights and systems in its ‘income bonded loan’ concept to third party lenders. The company had never reached the stage of carrying on a trade. The issue was therefore whether the company had existed ‘for the purpose of carrying on a trade’.

The FTT found that the purpose of the...

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