Penetrating the obscuring mists of judicial precedent

In the case of Drake v HMRC, the First-tier Tribunal had to grapple with conflicting judicial precedents to decide a case concerning a lost deposit. We attempt to penetrate the obscuring mist.

In the December 2016 issue of Tax Adviser, my article ‘Return of the naïve’ looked at the Upper Tribunal case of Hardy v HMRC [2016] UKUT 332 (TCC). That case concerned Mr Hardy’s aborted purchase of a property, which led to him losing the £72,000 deposit he had paid on first entering into the contract. The Upper Tribunal concluded that the loss did not give rise to an allowable loss, essentially because Mr Hardy had not disposed of a chargeable asset in the process.