Was a loan stock instrument a relevant discount security?
In Nicholas Pike v HMRC (A3/2013/1996 – 20 June 2014) the Court of Appeal dismissed the taxpayer’s appeal against the denial of a claim for loss on a relevant discounted security (RDS).
Mr Pike had set up a company which had issued to him £6 million nominal redeemable loan stock. He had then transferred the loan stock to a trust and claimed a £3 463 563 loss on the disposal of the loan stock on the basis that it was a RDS for the purpose of FA 1996 sch 13.
Whether the loan stock was a RDS depended on whether the amount payable on maturity or redemption would involve a ‘deep gain’. This in turn depended on whether the issue price was relevantly less than the amount so payable. The issue was therefore whether what Mr Pike described as...
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Was a loan stock instrument a relevant discount security?
In Nicholas Pike v HMRC (A3/2013/1996 – 20 June 2014) the Court of Appeal dismissed the taxpayer’s appeal against the denial of a claim for loss on a relevant discounted security (RDS).
Mr Pike had set up a company which had issued to him £6 million nominal redeemable loan stock. He had then transferred the loan stock to a trust and claimed a £3 463 563 loss on the disposal of the loan stock on the basis that it was a RDS for the purpose of FA 1996 sch 13.
Whether the loan stock was a RDS depended on whether the amount payable on maturity or redemption would involve a ‘deep gain’. This in turn depended on whether the issue price was relevantly less than the amount so payable. The issue was therefore whether what Mr Pike described as...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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