Teesside law firm Endeavour Partnership has become the first legal practice in the country to assist a client in reversing capital gains tax worth hundreds of thousands of pounds, on the grounds of mistake, setting a precedent in English and Welsh law.
Solicitors at Endeavour Partnership have been working with a father and son farming partnership in North Yorkshire that had transferred several pieces of land into a discretionary trust on the advice of another regional law firm without realising that the transfers would lead to an immediate substantial capital gains tax charge and yet further capital gains tax if the land was later sold.
Stockton-based Endeavour Partnership worked with the father and son over many months and have now succeeded in getting the transfer reversed, meaning that the capital gains tax of £350,000 will no longer be applied.
This is the first time that the High Court has set aside a transaction because of a mistaken understanding about capital gains tax and also the first time that rescission of a transaction has been ordered on the ground of mistake using the equitable tracing principle.
Endeavour Partnership’s commercial litigation department, including partner Paul Bennett (pictured above, right) and junior solicitor James Craddock (above left), worked on the case which took around a year to conclude.
Bennett said: “This is a hugely significant case as we have now set a legal precedent concerning the rules on capital gains tax in UK law.
“The High Court Order has meant that a ruinous capital gains tax assessment will now be removed and has also allowed roll over relief to be claimed from capital gains tax in respect of some substantial land holdings that were subsequently sold and the proceeds reinvested by the farm in a new holding of land.”
Craddock added: “To have worked on such a high profile case that has now set a precedent was such a privilege for me so early in my career.
“I am working with some of the most experienced solicitors in the country and Endeavour Partnership is truly leading the way in developing the next generation of the legal profession.”
Endeavour Partnership is one of the North East’s leading commercial law firms working with regional, national and global clients to provide high quality advice on a range of business law matters including mergers and acquisitions, intellectual property, litigation, commercial property and corporate recovery and insolvency.