Dispute on consideration received for property disposal

The taxpayer who was described as ‘bright and intelligent’ but had ‘fallen on hard times’ conducted his appeal. He had also spent some time in prison.

In 2001 he bought a property from which he ran his business. In 2005 he sold a half-share to his domestic partner. Before that in April 2010 the property was sold to LSL a company in which the taxpayer’s partner had an interest. The couple parted in 2011.

The taxpayer did not include the property disposal in his tax return and after an enquiry HMRC assessed the taxpayer to capital gains tax on his share of the proceeds. 

The First-tier Tribunal accepted the taxpayer’s statement that he had received payment from LSL for the property. The only benefit was that his mortgage liability was ‘discharged or assumed’ by LSL. The sum on the mortgage was substantially less that the...