In J Lewis v HMRC [2016] UKFTT 254 (18 April 2016) the FTT found that the market value of shares should be ascertained as if an investment in the company had taken place.
HMRC had disallowed a claim for share loss relief under ITA 2007 s 131. Mr Lewis claimed that the shares had become of negligible value.
The FTT accepted that the shares had been issued to Mr Lewis albeit in a rather informal fashion. It also found that the shares had had some value at the time of issue even though the companies had ceased trading two months later. This was on the basis that at the time of issue a serious investor had considered injecting capital into the company.
As Mr Lewis had acquired the shares otherwise than under a bargain made at arm’s length their acquisition cost was deemed to...
