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The taxpayer was one of around 20 customers to buy a gilt strip planning scheme. The aim was to create a loss as a result of transactions in discounted securities. The taxpayer claimed the loss supposedly created by the scheme in his self assessment tax return. HMRC disallowed the claim.
At the taxpayer’s appeal, the First-tier Tribunal decided that he was not entitled to relief for his alleged losses. The taxpayer appealed.
The Upper Tribunal (Tax and Chancery Chamber) said that the First-tier Tribunal had been right to conclude that there was no real risk that the taxpayer would suffer real financial loss and that an anti-Ramsay device, the possibility that the option would not be exercised, could be disregarded.
The scheme was self-cancelling and the taxpayer’s economic position was the same before and after he took part in it, apart from the fee he paid his adviser to take part.
The First-tier Tribunal’s view of the facts was realistic and it had not made an error of law.
The taxpayer’s appeal was dismissed.
