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Robert Brown v HMRC

In Robert Brown v HMRC (TC03118 – 11 December 2013) the tribunal had to decide whether shares in a trading company had become of negligible value so as to create a loss for capital gains tax purposes (TCGA 1992 s 272).

Mr Brown had invested in a research and development company.

The tribunal accepted Mr Brown’s contention that the shares were of no value on normal methods of valuation. The company’s liabilities exceeded its assets and no one would place current value on the very remote possibility of future dividends.

However the tribunal also noted that one shareholder (who was also the sole director of the company) continued to invest in the company. The tribunal found that investing in the company in this situation would be a gamble but stressed that ‘a prudent purchaser is not necessarily a risk averse one’ as the value placed on the...

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