Bunting v CRC: Upper Tribunal ruled in favour of HMRC

The Upper Tribunal handed down its decision in CRC v Timothy Bunting [2025] UKUT 96 (TCC) on 19 March 2025 denying capital gains tax (CGT) relief on irrecoverable loans. The case concerned loans that Mr  Bunting had made to a trading company. The loans were released in exchange for an issue of shares that all parties agreed were worthless shortly before the company went into liquidation. Mr Bunting claimed a loss of £2.2m in respect of the loans believing that they had become irrecoverable. HMRC rejected the claim on the basis that the loans no longer existed at the time the claim was made as they had been converted into shares. The Upper Tribunal ruled in favour of HMRC overturning the previous First-tier Tribunal decision.

Background

In the early 2000s the taxpayer – Mr Bunting – wanted to establish a business dealing in...