Ordinary Share Capital: Clarity in Relation to Dividend Rights
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Capital Gains, Disposal, Dispute, Entrepreneur’s Relief, ER, HMRC, Interpretation, Investigation, Ordinary Share Capital, Purposive, Straight to the Point, Structuring, U.K. TaxThe Upper Tribunal has overturned the decision of the First-tier Tribunal in McQuillan v HMRC, finding that non-dividend bearing redeemable shares constituted ordinary share capital for the purposes of section 989 of the Income Tax Act 2007 (section 989) ([2017] UKUT 344 (TCC)) (see Focus “Ordinary share capital: can a negative prove a positive?”, www.practicallaw.com/2-631-2725).
While the decision is perhaps unsurprising given that the First-tier Tribunal’s decision was a departure from HM Revenue & Customs’ (HMRC) practice and conflicted with Castledine v HMRC, taxpayers should be mindful of its potential impact ([2016] UKFTT 145 (TC), www.practicallaw.com/3-627-1036). Read more.
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