Sale of property — Gain realised on sale of cottage — Assessment to CGT raised — Allowable loss claimed for goods previously stolen from cottage — Value of stolen property not shown to exceed £2,000 — General commissioners holding that there was no basis for claim for capital losses on sale of cottage — Appeal court confirming that assessment to CGT correct
N owned a cottage in Wales. He sold it at the end of the 1970s. It was agreed that a chargeable gain arose in respect of that sale for the year 1981-82 in the sum of £6,174. He was assessed £3,174 CGT.
N appealed against the assessment contending, first, that there should be deducted from the gain on the sale an amount equal to the replacement value of the cottage, ie £160,000, so that an allowable loss of that amount arose. Second, he argued that items had been stolen from the cottage in 1979 and that insurance moneys were insufficient to enable him to replace them. He claimed an allowable loss in respect of those items. The general commissioners rejected both arguments. The High Court upheld that decision. N appealed.
Held The appeal was dismissed.
1. The High Court was right to uphold the decision of the commissioners that there was no basis for a claim of capital losses on the sale of the cottage based on its replacement value and the assessment was properly made.
2. Moreover, the effect of section 128 of the Capital Gains Tax Act 1979 was that no allowable loss arose unless the acquisition cost of a single item or its value at the time of acquisition in the case of inherited property, exceeded £2,000 (£6,000 in respect of disposals after April 5 1989).
3. There were no facts found by the commissioners in relation to the value of the stolen property and consequently N had not shown that the value of any of the items at the time of acquisition exceeded £2,000.
4. On the facts found the commissioners’ decision was correct and there was no basis on which to interfere with that decision.
The appellant taxpayer, N, appeared in person; Launcelot Henderson (instructed by the Solicitor for the Inland Revenue) appeared for the inspector, Mr Ward.
