Morrison: CGT and settlement payments

The Court of Session finds for the taxpayer in Sir Fraser Morrison v HMRC [2014] 113 XA145/13, confirming that a payment made in the context of an out of court settlement may be deducted under TCGA 1992 s 49, so as to reduce liability to CGT. Questions remain, however, as to whether a settlement payment can properly be described as a ‘contingent liability’. It is clear from Lord Tyre’s opinion that HMRC’s concession narrowed the scope of the debate considerably. With the benefit of hindsight, HMRC’s concession may have been a strategic blunder.