(or the Revenue gets its pound of flesh)
Nigel Doran considers the capital gains tax implications from the case Garner v Pounds Shipowners & Shipbreakers Ltd.
In Garner v Pounds Shipowners & Shipbreakers Ltd, the question arises whether expenditure which the vendor of a chargeable asset agrees with the purchaser to incur on, or in connection with, the asset should be taken into account in ascertaining and valuing the consideration for the sale. The High Court held that it could be but its decision has now been reversed by the Court of Appeal.
Facts of the case
The essential facts were as follows. The taxpayer company granted an option to buy certain land in Portsmouth for a sum in excess of £4 million. The option price was £399,750 to be held by the taxpayer company's solicitors as stakeholders until such time as the taxpayer company had procured the release of various restrictive covenants over the land. However, although the taxpayer company was to use its best endeavours to
