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First-tier Tribunal decision in Cooke and rectification

08 July 2024 / Kevin Slevin
Issue: 4944 / Categories: Comment & Analysis , BADR , entrepreneurs’ relief , Business
181101
Putting things right?

Key points

  • The taxpayer held 4.99998% of the company’s shares rather than the 5% required for entrepreneurs’ relief.
  • The First-tier Tribunal decided the High Court would have allowed rectification even though this had not been applied for.
  • Importance of being able to rely on tax case reports as an accurate and full reflection of proceedings.
  • Consideration of the voting rights attached to the taxpayer’s shares.
  • Tax advisers must act promptly if they wish to correct a mistake.

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)...

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