First-tier Tribunal decision in Cooke and rectification

This article is about the outcome of a claim to entrepreneurs’ relief – what we now call business asset disposal relief (BADR) – a claim which was determined by an appeal to the First-tier Tribunal. The case on which I am focusing is Jonathan Cooke (TC9118).

It is my view that (a) HMRC had no choice but to reject the taxpayer’s claim to relief in the first instance and (b) that the tribunal may have been generous in allowing the relief.

My purpose in writing this article is partly to warn against approaching similar situations with what could well turn out to be a false sense of optimism and possibly of more importance to flag up some consequential issues for both HMRC and those who advise on tax matters.

Contrary to my normal practice when writing for Taxation I shall not go into the facts...