News-taxcase-Harding

02 July 2007

Categories: Tax cases , Capital Gains

Nicholas John Harding (SpC 608)

Qualifying or not?

The case of Harding concerned a scheme designed to hold over a gain on the sale of shares into loan notes from the acquiring company and then to claim that the subsequent redemption of the loan notes was not liable to tax.
The appellant was a director of a software business carried on through a holding company Q and its wholly owned operating company F.
On 13 January 1995 the appellant and the other two directors received five year loan notes in exchange for their shares in Q from C a German company. These could be redeemed early by the holder issuing a redemption notice between 1 and 21 January each year for repayment on 1 July. Mr Harding and his fellow directors issued redemption notices on the same day as the loan notes were issued. The loan notes included...

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