Robert Venables QC and James Kessler (instructed by Tony Tinsley) for the taxpayer company.
Capital gains tax – Computation of chargeable gain – Cost of acquisition of asset – Asset held on 6 April 1965 – Shares – Reorganisation of share capital – Taxpayer acquiring all ordinary stock in company before 6 April 1965 – Other shareholders holding preference stock – Scheme of arrangement after 6 April 1965 by which preference stock cancelled – Taxpayer paying cash to preference stockholders under scheme of arrangement – Taxpayer subsequently disposing of all ordinary stock in company – Whether chargeable gain or loss on disposal to be calculated by straight-line apportionment over complete period of ownership – Whether acquisition cost market value of stock at date of scheme of arrangement – Whether scheme of arrangement a reorganisation – Whether taxpayer’s stockholding concerned in the reorganisation – Whether taxpayer’s stockholding following scheme of arrangement a new holding – Whether taxpayer’s new holding differing from original shares – Whether cash payment to preference stockholders consideration for new stockholding – Taxation of Chargeable Gains Act 1992, ss 126, 128, Sch 2, para 19(2), (3).