A taxpayer’s share loss relief claim for income tax purposes was unsuccessful as the company was not at any time an eligible trading company and could not therefore be a qualifying trading company for loss relief purposes.
The appellant claimed in his 2005/06 tax return a deemed ‘negligible value’ disposal of his shares on 5 April 2006. HM Revenue and Customs (HMRC) accepted this claim, but disputed the appellant's claim to set the capital loss arising against his income for the tax year 2004/05 under ICTA 1988, s 574 (since rewritten in ITA 2007, Pt 4, Ch 6).
The appellant became a shareholder in IR in October 2002. IR was a vehicle to exploit an idea for the creation of a financial product involving residential property mortgages. However, IR had difficulty raising sufficient funding to market the product, and by the end of July 2005 effectively abandoned hope of establishing itself as a mortgage lender. IR
