The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
These are our brief notes and thoughts on cases published in the last week or so which caught our eye and are likely to be of particular interest to tax practitioners. Full case reports and commentary on most of these cases will be included within our normal reference sources in the coming weeks.
The facts here are complex and were the subject of considerable dispute, but it is worth working your way through the judgement because it covers some important ground. The case concerns a property disposal by a company in circumstances where it had agreed that the profit on the disposal would accrue to its sole shareholder. The company originally argued that the gain itself actually accrued to the shareholder rather than to it as a company, but after accepting that it was taxable on the gain sought a deduction under the loan relationship rules for the amount paid to the shareholder.
HMRC’s argument that the payment was a distribution was not accepted, but the tribunal determined that it was not deductible as a loan relationship because it had not been recognised in the relevant accounts. There are many points of interest in the decision ― not only the analysis of the loan relationship rules but also the comments on the accounting policy which was adopted. Perhaps most interesting of all was the question of whether or not the company had made a claim to relief within the time limits. The judge’s analysis in paras 147 onwards, which concludes that there was a valid claim, repays careful reading, not least because on the face of it the company did not actually appear to have made a claim for relief. The analysis here might be useful in other situations where there is a dispute over the validity of a claim.
This is a strange case. The director had built up a
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