Loss claim on the basis a payment was a qualifying loan

In February 2010 the taxpayer an oil derivatives trader made a payment of £130 020 to Emerging Markets Investment in respect of a new project after a meeting with Mr F who was director of that company. A year and a half later the company ran into financial difficulties and in June 2013 he was repaid £30 000 in relation to the advance.

The taxpayer said the original payment was a qualifying loan and that as only £30 000 had been repaid he suffered losses of £100 000 relating to the  new project which he claimed against capital gains under TCGA 1992 s 253. HMRC refused the claim saying the money had not been loaned for the purpose of a trade but was an investment.

The taxpayer appealed.

The First-tier Tribunal found from the evidence that the taxpayer’s knowledge of the new...