Quantifying the damage suffered if the advice was negligent and Mr Glucose relied on it is rather more complicated than it looks. One might think that one could not take into account of the income tax liability because Mr Brown specifically warned Mr Glucose that it would arise if the transaction took place at an undervalue.

The measure of the damage resulting form BJS’s failure to point out the EIS consequence of the proposed transaction, however, id the difference between Mr Glucose’s actual position and the position he would have been in, had the advice been given.

If it is the case that he would not have proceeded with the property transaction had he been warned about the EIS consequences, he would not have incurred either the capital gains tax or the income tax liability and therefore the liability for income tax is part of the measure of his damage.

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