In P Savva v HMRC (and related appeals) (TC02625 – 9 April) an individual (S) purchased certain corporate bonds marketed by a bank which had been stripped of interest for a certain period. At the end of the period S sold the bonds. HMRC issued amendments to his self-assessment treating the profits which he had made on the sale of the notes as discounts which were chargeable to income tax under what is now ITTOIA 2005 s 381. The First-tier Tribunal dismissed S’s appeal applying the principles laid down by the HL in National Provident Institution v Brown 8 TC 57.
Why it matters: This is the second recent case concerning ‘stripped bond’ avoidance schemes following HMRC’s victory in...
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