Burca v Parkinson
| Jurisdiction | England & Wales |
| Judgment Date | 04 July 2001 |
| Date | 04 July 2001 |
| Court | Chancery Division |
Chancery Division.
Park J.
Patrick Soares (instructed by David Goodman & Co) for the taxpayer.
Timothy Brennan QC (instructed by the Solicitor of Inland Revenue) for the Crown.
The following case was referred to in the judgment:
Garner v Pounds Shipowners and Shipbreakers Ltd TAX[2000] BTC 190
This was an appeal by the taxpayer from a special commissioner's decision ((2000) Sp C 247) dismissing his appeal against capital gains tax assessments for 1988-89 and 1989-90 arising from a sale of shares.
The taxpayer owned 98 or 99 of 100 issued shares in a company. In 1987 he needed to borrow money and arranged to borrow £50,000 from his parents who lived abroad. He used the shares as security for the loan and agreed that if the shares were sold within two years his parent would be entitled to 60 per cent of the net proceeds of sale. The shares were in fact sold within two years and the taxpayer paid his parents 60 per cent of the proceeds as agreed. The Revenue raised capital gains tax assessments on the basis that the taxpayer was liable to tax on the full amount received on the disposal of the shares since he was the beneficial owner of all the shares. The taxpayer appealed arguing that he should be liable to CGT only on the 40 per cent of the purchase price which remained available for him after allowing for the rights of his parents under the agreement. A special commissioner dismissed the appeal, holding that the relationship between the taxpayer and his parents was that of debtor and creditor and that there had never been any transfer of beneficial ownership of the shares to them. The taxpayer appealed to the High Court.
Held, dismissing the appeal:
When assessing the consideration for disposal of an asset for capital gains tax purposes, the relevant amount was the consideration for which the asset was sold rather than the amount which the vendor was entitled to retain from the consideration. In the present case the taxpayer was rightly assessed on the basis of the amount he had received on the disposal of the shares and not the amount he retained after he had repaid the loan to his parents. The parents' contractual right arising out of the loan agreement was a factor unrelated to the computation which did not have to be taken into account. On the facts the taxpayer was and always had been the beneficial owner of substantially all of the shares in the company and the consideration he received for them rightly formed the basis of the capital gains tax liability.
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FTC/47 & 50/2012 - HMRC - and - Sir Fraser Morrison
...taken into account in establishing the amount of the consideration. [52] I was referred also to Burca v. Parkinson (Inspector of Taxes) [2001] STC 1298 and Gray’s Timber Products Ltd v. Revenue and Customs Commissioners [2010] STC 782. They are to much the same effect. In Burca the taxpayer......
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Jerome v Kelly (Inspector of Taxes)
...of the consideration due under a contract, which does not alter the capital gains tax liability of the person making the disposal (see Burca v Parkinson [2001] STC 1298, a decision of Park J in favour of the Revenue). But as already noted, the assignments had a more immediate and far-reach......
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Jerome v Kelly (Inspector of Taxes)
...from the computation of the chargeable gain on the disposal by the owner; and, relying on the decision of Park J in Burca v. Parkinson [2001] STC 1298 at 1306e-g, that the same applies if the vendor holds the purchase price when he receives it on trust for the third party. 43 Mr Henderson g......
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Revenue and Customs Commissioners v Sir Alexander Fraser Morrison
...liability to be taken into account in establishing the amount of the consideration. [52]I was referred also to Burca v Parkinson (HMIT)TAX[2002] BTC 64 and Grays Timber Products Ltd v R & C CommrsTAX[2010] BTC 112. They are to much the same effect. In Burca the taxpayer sold all his shares ......