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M Freeman (TC2885)
The taxpayer redeemed £235,000 loan notes at par in 1998/99 and a further £800,000 the following year.
He included the redemptions on his tax returns for the relevant years because the loan notes did not at the time qualify for taper relief.
He taxpayer redeemed loan notes worth £2,602,462 in December 2002 and claimed taper relief in relation to the redemption in his 2002/03 return, saying the loan notes were not a qualifying corporate bond.
HMRC raised a discovery assessment in relation to the December 2002 redemption. The taxpayer appealed.
The First-tier Tribunal ruled that a Revenue officer looking at the return in 2002/03 would know loan notes were qualifying corporate bonds, that no taper relief was due, and that more tax would be due.
The conditions for raising a discovery assessment were not satisfied.
The taxpayer’s appeal was allowed.
