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The High Court judgment in Drummond seems to save the taxpayer from having an artificial loss converted into an artificial gain, says MIKE TRUMAN
KEY POINTS
- Original decision in Drummond would have created an artificial gain.
- Appeal allowed in part to create no gain no loss.
- Should TCGA 1992 ss 37 and 39 have been construed together?
If you managed to get your company to market before the dotcom bubble collapsed you made a lot of money.
That was the position that Jason Drummond found himself in having taken Virtual Internet plc (a company only set up in 1996) to a stock exchange listing during 2000-01 making a capital gain of £4.8 million on the shares he sold.
It is not clear whether this is before or after taper relief but he certainly had a gain after taper relief that exceeded £1.96 million.
Mr Drummond was not inclined to pay tax at 40% on these gains and was therefore very...
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