Case details

Hancock and another (Appellants) v Her Majesty’s Revenue and Customs (Respondent)

Case ID: UKSC 2017/0111

Case summary


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 Section 132 of the Taxation of Chargeable Gains Act 1992.


The appellants are husband and wife. In August 2000, they sold their shareholding in a business in exchange for Loan Notes in two tranches, A and B. In March 2001, additional purchase consideration in the form of tranche B loan notes became payable. In 2002, deeds of variation were executed that had the effect of classifying the additional Loan Notes into qualifying corporate bonds. The earlier issued tranche B loan notes remained as non-qualifying corporate bonds. In May 2003, all tranche B loan notes were exchanged for two Secured Discounted Loan Notes which were qualifying corporate bonds. The Secured Discounted Loan notes were subsequently redeemed for cash. The Appellants appealed to the First Tier Tribunal about the chargeable gain arising on the redemption of the Secured Discounted Loan Notes. The First Tier Tribunal held that the conversions were to be treated as a single conversion for the purposes of s116(1) of the Taxation of Chargeable Gains Act 1992 such that the transaction avoided Capital Gains Tax on the gain which was latent in the loan notes issued in 2000. HMRC appealed to the Upper Tier and the Upper Tier allowed HMRC’s appeal. The Appellant’s appealed to the Court of Appeal and the Court of Appeal dismissed their appeal. The Appellants now appeal to the Supreme Court of the United Kingdom.

Judgment appealed

[2017] EWCA Civ 198


  1. Anthony Hancock
  2. Tracy Hancock

The Commissioners for Her Majesty's Revenue and Customs



Lord Reed, Lord Sumption, Lord Carnwath, Lord Briggs, Lady Arden

Hearing start date

06 Dec 2018

Hearing finish date

06 Dec 2018

Watch hearing
06 Dec 2018 Morning session Afternoon session