Lee Sharpe looks at some recent cases covering when a taxpayer loses their deposit on a property.
It is common for brand new developments to require would-be investors to fund a deposit towards the build – typical in ‘off-plan’ projects. These may be high-risk ventures, and it is not unusual for the investor to lose their deposit. HMRC will typically reject any claim for tax relief. But is this always the correct treatment?
This article considers some case law from the last few years that may appear inconsistent, but which may nevertheless offer the investor some hope of a tax relief claim in the right circumstances.
Background
TCGA 1992, s 144 (‘Options and forfeited deposits’) broadly sets out, amongst other things, that:
- the abandonment of any option (other than specified in TCGA 1992, s 144) by the person