W Reeves v HMRC

In W Reeves v HMRC [2017] UKFTT 192 (28 February 2017) the FTT found that TCGA 1992 s 167 applied so that hold-over relief (s 165) was not available.

Mr Reeves a US citizen who was neither resident nor ordinarily resident in the UK transferred his interest in a business by way of a gift to WHR a new UK incorporated and resident company of which he was the sole shareholder and director. Mr Reeves claimed hold-over relief but HMRC disallowed the claim on the basis that it was precluded by s 167 (gifts to foreign-controlled companies). This was because Mr Reeves’s wife was neither resident nor ordinarily resident in the UK and as an ‘associate’ of Mr Reeves could be deemed to control WHR (ICTA 1988 s 416).

Mr Reeves contended that a literal construction of s 167 would produce an irrational ...