Capital Gains Tax: Mansworth v Jelley Capital Losses

30 September 2009

HM Revenue & Customs brief 30/09, issued during May 2009, announced that their guidance, issued following the Court of Appeal decision in the case Mansworth v Jelley, was incorrect.

 

This guidance concerning the Capital Gains Tax treatment of shares acquired via an unapproved employee share option, resulted in a capital loss arising to an individual upon the exercise of such an option on or before 9 April 2003, despite in reality such a loss never arising.

 

HM Revenue and Customs has stated that where a loss calculated in line with the previous guidance arose in a tax year later than 1996/1997 and that year remains open to amendment or is subject to an open enquiry, the tax payer is expected to amend their capital gain/loss calculation in line with the revised guidance. In addition, the availability of a capital loss arising in a tax year earlier than 1996/1997 and offset against a capital gain arising in 2007/08 or a later year, may be challenged as a result of the revised guidance.

 

Should you require any assistance in amending your tax affairs in relation to the above, then please do not hesitate to contact either David Buck or Delyth Barnett in the first instance.