In S and L Schechter v HMRC [2017] UKFTT 189 (2 March 2017) the FTT found that a nominee agreement and a declaration of trust had not transferred the beneficial ownership of assets held by two companies to their shareholders.
This was an appeal against HMRC’s decision to disallow losses. The appellants were shareholders in two companies Vinexsa and Sweet Revenge which held properties in the UK and in France. They contended that as a result of a nominee agreement and a declaration of trust Vinexsa and Sweet Revenge held their respective assets as nominees for the Vinexsa shareholders. They also asserted that the French property and one of the London flats were held as trading stock so that trading losses arising in respect of those properties could be offset against other taxable income accruing to them.
The first question was whether the...
