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On appeal from: [2017] EWCA Civ 198

This appeal considered whether a conversion of both non-qualifying corporate bonds and qualifying corporate bonds in a reorganisation is to be treated as a single conversion or two distinct conversions for the purposes of the Taxation of Chargeable Gains Act 1992, s 132.

The Supreme Court unanimously dismissed the appeal. The Court held that the question of whether there was a single conversion, or two separate conversions, was one answered by applying the provisions of the 1992 Act to the facts. The Court considered that the purpose of the provisions in the Act is to enable all relevant reorganisations to benefit from the same rollover relief, and this would be easily avoided if it found in favour of the appellants. The Supreme Court concluded that, on the true interpretation of s 116(1)(b) of the 1992 Act, the conversion of both non-qualifying corporate bonds and qualifying corporate bonds in a reorganisation should be treated as two distinct conversions,thus falling within the charge to capital gains tax.

For judgment, please download: [2019] UKSC 24
For Court’s Press Summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court Website (6 Dec 2018 afternoon session) (6 Dec 2018 morning session)