Seconds out ... Round Two!

PRIOR TO RECENT changes in legislation introduced by FA 2006 companies with capital losses that had no use for them e.g. insolvent groups were able to sell them to profitable groups of companies with capital gains. One particular scheme which allowed groups to do this without the restriction of the pre-entry loss rules contained in TCGA 1992 Sch 7A was a capital loss 'refresher scheme' that relied on Sch 7A para 1(6).
The correct construction of para 1(6) has very recently been considered by the Special Commissioners in two cases (Five Oaks Properties and others v CIR [2006] STC (SCD) 769 and Limitgood Ltd & Anor v CIR [2007] STC (SCD) 612). In both cases Dr John Avery Jones decided in favour of HMRC but in the first case he sat alone whereas in the second case he sat with Theodore Wallace who had...