Wroe and others v HMRC

In Wroe and others v HMRC [2022] UKFTT 143 (TC) (25 April 2022) the FTT dismissed the taxpayer’s appeals against income tax assessments raised under the transactions in securities legislation in ITA 2007 Pt 13 Ch 1 ss 682–713 and ruled that the amounts received by taxpayers on the repurchase of the preference shares were chargeable to income tax.

The transactions in securities rules broadly prevent individuals extracting money which would otherwise have been income in capital form. In this case a new holding company (J) had been inserted above an existing company (P) in exchange for a mixture of ordinary and preference shares. The appellants had been the principal ordinary shareholders in P. The preference shares were subsequently repurchased by the company and the disposal was returned as a capital gain. The appellants had applied for and received statutory clearance from HMRC that the transactions in securities legislation would...