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S Joyce v HMRC (and related appeal)

In S Joyce v HMRC (and related appeal) (TC00817 – 2 December) two company directors had agreed to purchase shareholdings in another company (T). They soon discovered that there were ‘serious deficiencies’ in T’s accounting records. T subsequently went into liquidation. The directors claimed that since their shares in T had become of ‘negligible value’ they should be entitled to relief for this loss against their income. HMRC rejected this claim on the basis that what is now ITA 2007 s 131 stipulated that such relief was only due where an investor had subscribed for new shares and was not available where an investor had purchased existing shares. The First-Tier Tribunal upheld HMRC’s ruling and dismissed the directors’ appeals.

Why it matters: ITA 2007 s 131 provides that subject to specific provisions losses on disposals of shares may be set against general income. The First-Tier...

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