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IRC v Montgomery

[1975] 49 TC 679

Case summary last updated at 21/02/2020 18:34 by the Oxbridge Notes in-house law team.

Judgement for the case IRC v Montgomery

·   A building owned by the trustees was damaged by fire and they became entitled to recover insurance money. 
·   The husband of one of the trustees paid them for an assignment of the trustees' rights under the policies. In due course the insurers paid the husband sums totalling £75,192. As the law then stood rights under insurance policies were not “assets” for CGT purposes. The Crown contended that the money was a “capital sum derived from assets”, i.e. the damaged property, and was therefore liable to CGT by virtue of what is now s22(1). 
·   Walton J
·   From what asset of the trustees was the capital sum derived? From sale of the rights under policy not property. 
s22 is confined to cases where no assets are acquired. (a)-(d)= examples where there was no acquisition of an asset. 

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