P Duke v HMRC

In P Duke v HMRC (TC00593 – 2 August) an individual (D) had established a trust of which he was the life tenant in 1991. In 1998/99 the trust realised a substantial capital gain on the disposal of some loan notes. On his self-assessment return D claimed a capital loss to set against this gain. HMRC subsequently discovered that this alleged loss was attributable to a ‘scheme’ which had been intended to take advantage of the provisions of TCGA 1992 s 71(2) by providing for a loss to be incurred by a UK resident while a corresponding gain accrued to trustees who were resident outside the UK for non-resident UK beneficiaries.

It issued an amendment to D’s self-assessment disallowing the loss claim. D appealed accepting that the scheme was ineffective (following the decision in Corbally-Stourton v HMRC Sp C [2008] SSCD 907)...