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A Hancock, T L Hancock (TC3816)
The taxpayers were a married couple who owned all share capital in a limited company. They sold the capital to another company in 2000 and received loan notes as consideration.
The notes could be redeemed in US dollars at an exchange rate other than that set on the day of redemption - which prevented the notes from being qualifying corporate bonds under TCGA 1992 s 117.
The couple received further loan notes in 2001 which also included a provision enabling the holders to require repayment in US dollars. A deed of redemption later removed the right to redemption in US dollars making them qualifying corporate bonds.
The taxpayers exchanged the revised loan notes on 7 May for secured discounted loan notes – also qualifying corporate bonds – which were redeemed in June 2003.
HMRC issued assessments charging capital gains tax (CGT) under TCGA 1992 s 116....
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