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UT (Tax & Chancery) UT-2024-000113 - [2025] UKUT 00165 (TCC)
Fecha: 08-Abr-2025
Section 42(2) of this Act shall not apply in relation to the claim The claim shall relate to the later year
Section 42(2) of this Act shall not apply in relation to the claim.
The claim shall relate to the later year.
Subject to sub-paragraph (5) below, the claim shall be for an amount equal to the difference between— (a) the amount in which the person is chargeable to tax for the earlier year (‘amount A’); and (b) the amount in which he would be so chargeable on the assumption that effect could be, and were, given to the claim in relation to that year (‘amount B’).
…
Effect shall be given to the claim in relation to the later year, whether by repayment or set-off, or by an increase in the aggregate amount given by section 59B(1)(b) of this Act, or otherwise.”
It follows from these provisions that, where a taxpayer wishes to make a carry-back claim for loss relief, the claim does not need to be included in a return, because section 42(2) of TMA is disapplied by paragraph 2(2). The effect of sub-paragraphs (3) and (4) was explained by Lord Hodge JSC in De Silva [2017] 1 WLR 4384 , para 19:
“Paragraph 2 of Schedule 1B thus is concerned with relief sought for a loss incurred in the later year (which I will call ‘Year 2’) by carrying it back to the earlier year (‘Year 1’). Significantly, paragraph 2(3) makes it clear that the claim relates to Year 2. The quantification of the claim is governed by paragraph 2(4): the claim is the difference between amount A and amount B on the counterfactual assumption that effect could have been and was given to the claim in Year 1. That assumption is counterfactual because paragraph 2(3) and paragraph 2(6) relate the claim and the giving effect to the claim to Year 2.””
- Heading
- INTRODUCTION
- THE FTT DECISION
- THE GROUNDS OF APPEAL TO THE UPPER TRIBUNAL
- THE HEARING
- FACTUAL BACKGROUND
- FIRST SHARE LOSS RELIEF ISSUE The FTT identified the first issue in the following terms at [48(1)]
- The Law
- Schedule 1A to this Act shall apply as respects any claim or election which—
- Section 42(2) of this Act shall not apply in relation to the claim The claim shall relate to the later year
- the claim does not have to be made in the return (paragraph 2(2))
- for both tax years
- Otherwise the claim must specify either the year of the loss or the previous tax year
- This subsection explains how the deductions are to be made
- If an individual—
- Case law
- Section 42(2) of this Act shall not apply in relation to the claim The claim shall relate to the later year
- Derry SC
- There were two issues before the Court
- Outline of the Appellant’s case
- Discussion and Analysis
- Prior to the ITA all loss relief claims under ICTA were to be made or treated in a similar way – Schedule 1B TMA applied There is no doubt that Schedule 1B TMA applied to trade loss relief claims made under s.380 ICTA
- The ITA made a limited but material change in the law from ICTA on share loss relief claims
- Appellant’s other arguments considered
- Summary
- Conclusion
- SECOND SHARE LOSS RELIEF ISSUE
- The Law
- An officer of the Board may enquire into— a claim made by any person, or
- Cotter
- Derry CA
- Derry SC
- HMRC’s case in outline
- The present case should have been distinguished on its facts from Derry CA The Appellant’s case in outline
- Discussion and Analysis
- Derry CA not binding: the ordinary rules of precedent
- Distinguishing Derry CA
- Remaking
- THE CLOSURE NOTICE ISSUE
- The Law
- state that in the officer's opinion no amendment of the claim is required, or
- A closure notice takes effect when it is issued…”
- Case law
- Outline of the Appellant’s case
- Discussion and Analysis
- Conclusions