In the case of HMRC v Sir Alexander Fraser Morrison, the Upper Tribunal found that a payment made in settlement of a High Court action was not a contingent liability under TCGA 1992 s 49, thus overturning the decision of the First-tier Tribunal. Paul Howard examines what this would mean in similar situations.
This article considers the CGT treatment of contingent liabilities arising on a sale of shares in the light of the Upper Tribunal decision in HMRC v Sir Alexander Fraser Morrison [2013] UKUT 0497 (TCC) which was published on 21 October 2013.
Typically on a sale of shares the vendors of a company will give warranties and indemnities with regard to information provided to the purchasers; however these will be qualified in a letter of disclosure which will be an...
