In A Kerrison v HMRC [2017] UKFTT 322 (19 April 2017) the FTT found that a scheme intended to create a loss failed as a result of the value shifting provisions (TCGA 1992 s 30).
Mr Kerrison had implemented a scheme known as the ‘Excalibur scheme’. He had subscribed for shares at par value in a newly incorporated Isle of Man company Broadgate before selling them to an unconnected company Braye for a similar sum together with a share buy-back for their ‘fair value’ plus 9.1%. Braye had exercised its option and sold the shares back to Mr Kerrison who had funded the purchase with borrowing. A British Virgin Islands subsidiary of Broadgate had then made an interest free loan to Mr Kerrison enabling him to repay his borrowing and the loan was subsequently waived. Finally Mr Kerrison had donated...
