[2025] UKUT 00005 (TCC)

Mr Downey points out it was never any part of Ms Delaney’s case that the contract was conditional or enforceable and the FTT asked too much of her in requiring her to show that this was the case.

He refers to the FTT Decision’s at [5] where it stated :

“In this appeal, it is for the Appellant to show, on the balance of probability, that there was an enforceable contract for the transfer of business by the appellant to MDNSL prior to 3 December 2014”.

The FTT also referred to the relevant contract being an unconditional one at [38] and [41] of its decision stating for instance at [38] that:

“In order to succeed in this appeal the Appellant was required to evidence that there was an unconditional contract to dispose prior to that date which section 28 TCGA then deems to have been the date of disposal.”

It is not possible to interpret the FTT as having wrongly identified the conditionality of the contract as a disputed issue or of misapprehending the appellant’s case. Section 28(2) set out a separate timing provision where a contract was conditional based on the time at which the condition was satisfied. The FTT clearly understood that particular proviso was not in issue between the parties. The reason the FTT referred to the contract being unconditional simply reflected the fact that the proviso in s28(2) which applied to conditional contracts was not relevant.

As regards a requirement of enforceability Mr Downey submitted, that the legal enforceability of a contract was not part of the requirement under s28 and that such requirement was irrelevant given it was agreed that there had been an actual disposal. Section 28 was simply about when the contract which effected the disposal had been made. All that was required when the provision spoke of a contract having been made was acceptance of an offer supported by consideration. (The same point in relation to a superfluous enforceability requirement is in essence made under Ground 4 ).

It is wrong, in my view, however to read the FTT decision as imposing any separate requirement of legal enforceability before a court (over and above the question of whether a contract had been formed) in determining when a contract was made. The FTT rightly focussed on the issue of when the contract was made. Its reference to the contract needing to be enforceable was simply its way of expressing that a binding contract had to have been made according to the conventional principles of the law of contract.

The FTT did not thus rule out potential points in time at which a contract could be said to have been made on the basis of enforceability in court, but because no contract had been made in the first place. The FTT’s reasoning (as explained at [48] was that no contract had been made before 3 December 2014 because there was insufficient certainty as to the terms of the purported agreement prior to that date and “…a lack of certainty that [the taxpayer’s limited company] would acquire and at what price (or how such price would be determined)”.

While Mr Downey referred to the emphasis in Jerome and Underwoodv HMRC [2008] EWCA Civ 1423 on s28 TCGA being a timing provision in relation to which a disposal is assumed, that does not assist the appellant. The case is not authority for the proposition that the contract used for such timing provision does not have to be a valid binding contract in order to have been regarded as “made”.

Similarly, the fact that it was agreed there had been a disposal did not mean that when it came to establishing when a contract had been made under s28 it would still not be relevant to apply the normal principles as to contract formation. That was all the FTT rightly required (and as already mentioned the reason it rejected the appellant’s case was because lack of certainty as to critical uncertainty over price or price determination).