Payment to settle court proceedings deductible in computing gain
InB Nevis v HMRC (TC02061 – 22 June) a public company (L) acquired the share capital in another public company (N) in 2000. N’s chairman (B) had owned a substantial shareholding in N and following the takeover he received consideration valued at more than £33 000 000. In July 2002 B transferred much of this consideration (shares and loan notes) into a trust giving rise to a CGT liability. Meanwhile L had formed the opinion that a profit forecast which B had provided during the takeover negotiations had been misleading. L began court proceedings against B alleging fraudulent misrepresentation and seeking damages of £132 000 000. In 2006 B and L agreed an out-of-court settlement under which B paid L £12 000 000 plus legal costs of £5 668 648. B claimed that these...
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Payment to settle court proceedings deductible in computing gain
InB Nevis v HMRC (TC02061 – 22 June) a public company (L) acquired the share capital in another public company (N) in 2000. N’s chairman (B) had owned a substantial shareholding in N and following the takeover he received consideration valued at more than £33 000 000. In July 2002 B transferred much of this consideration (shares and loan notes) into a trust giving rise to a CGT liability. Meanwhile L had formed the opinion that a profit forecast which B had provided during the takeover negotiations had been misleading. L began court proceedings against B alleging fraudulent misrepresentation and seeking damages of £132 000 000. In 2006 B and L agreed an out-of-court settlement under which B paid L £12 000 000 plus legal costs of £5 668 648. B claimed that these...
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