Capital loss claims formed part of tax return

The taxpayer claimed capital losses by way of in-time amendments to previously submitted tax returns. This was as a result of the Court of Appeal’s judgment in Mansworth v Jelley [2003] STC 53 and HMRC's subsequent change of position. The taxpayer had sent a letter to HMRC enclosing revised calculations of capital losses realised on the disposal of shares acquired pursuant to an adjustable share option scheme with detailed amendments to the capital gains tax calculation pages in the relevant returns. After enquiries under TMA 1970 s 9A HMRC disallowed the losses.

The taxpayer appealed on the ground that his notifications of the losses were stand-alone claims and had not formed part of his tax returns. Therefore HMRC should have opened its enquiries under TMA 1970 Sch 1A and not under TMA 1970 s 9A. The First-tier Tribunal found that HMRC...