Paragraph 13B provides that where there has been a return of value, the return of value is reduced to the extent that the value is replaced in the company concerned. Under para 13C (2) (b) it must, however, be replaced as soon after the original return of value ‘as is reasonably practical in all the circumstances’. The existence of this provision has two effects on Mr Glucose’s claims.

It appears that Mr Brown advised Mr Glucose about this provision. A claimant for damages for breach of contract has a duty to mitigate his loss.

It is arguable that Mr Glucose should have mitigated his loss by replacing value in the company. Did he fail to do so? Was he advised that the time was already past at which it was first reasonably practical for him to have replaced the value so that the relief under para 13B would not apply?

Did he do so, but fail to persuade HMRC that the relief applied? In that case, should he have appealed against the closure notice?

These are issues for further enquiry which an expert would highlight for the litigating solicitors and, once further evidence was gathered, on which an expert might give evidence as to the approach which would have been adopted by a reasonably competent tax adviser.

Section 13B and s 13C also affect BJS’s argument in relation to the transaction with Carbon. For if Mr Brown became aware of that transaction within the time that it was still possible to replace value in the company satisfying the condition that that was as soon as possible as was reasonably practical in the circumstances, then a reasonably competent adviser would have advised Mr Glucose to do so at the time Mr Brown gave his advice in respect of the property transaction.

In that case, the prior transaction with Carbon would not have prevented the clawback of Mr Glucose’s rolled-over gains being triggered by the property transaction.

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