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J Shannon v HMRC

In J Shannon v HMRC [2018] UKFTT 17 (9 January 2018) the FTT found that the vendor of shares in a company had not been employed by that company so that the shares did not constitute business assets for taper relief purposes.

Mr Shannon was director and shareholder of Supercuts. He had sold the majority of his shareholding to Regis a US company listed on the New York stock exchange for shares in Regis.

Mr Shannon had then sold some of his shares in Regis in the 2002/03 tax year and the balance in 2003/04. Under the taper relief rules (TCGA 1992 Sch A1) as they applied during the relevant years if the Regis shares were business assets the actual gain would be reduced by 75% after two years’ ownership giving an effective CGT rate of only 10% at a time when the normal...

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