Ordinary Share Capital: Can a Negative Prove a Positive?
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Capital Gains, Disposal, Dispute, Entrepreneur’s Relief, ER, HMRC, Interpretation, Investigation, Ordinary Share Capital, Straight to the Point, Structuring, U.K. TaxThe recent decision in McQuillan v HMRC highlights the challenges faced by taxpayers seeking to apply correctly those parts of the UK tax code that require interpretation in the absence of conclusive definition ([2016] UKFTT 305 (TC)).
McQuillan addresses whether shares with no dividend rights can be said to carry a fixed rate of dividend and therefore not be treated as ordinary share capital for the purposes of entrepreneurs’ relief. In deciding that they did carry a fixed rate, the First-tier Tribunal (the tribunal) took a position that departs from both HM Revenue & Customs (HMRC) and market practice, and seemingly contradicts the recent tribunal decision in Castledine v HMRC ([2016] UKFTT 145 (TC)). Read more.
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