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A Hardy (TC4444)
The taxpayer exchanged contracts with a developer to buy two properties.
The funds to complete were not available leading the developer to rescind both contracts and retain the deposits paid by the taxpayer.
The taxpayer sold two houses in an attempt to raise funds and wished to offset the loss of the two deposits against the gains on the disposals.
HMRC did not accept the claim. The taxpayer appealed.
He said he became beneficial owner of the new properties after the contracts were exchanged – and he disposed of the ownership when the contracts were cancelled which led to the loss of the deposits he wanted to set against chargeable gains for the same year arising from the same business.
The First-tier Tribunal said “Neither the exchange of contracts nor the satisfaction of the condition as to construction of the houses marked the acquisition...
