Loan relationships: unallowable purposes and tax relief schemes
In Explainaway Ltd v HMRC (and related appeal) (TC01267 – 13 July) a company (P) held a large shareholding in another company (W).
It wished to sell half of these shares. In an attempt to avoid the corporation tax which would become due on the sale P sold the shares in March 2001 to a newly acquired subsidiary (E).
In April 2001 E sold those shares in the open market realising a chargeable gain of £8 595 731.
In November 2001 E incorporated three subsidiary companies. E and its subsidiaries then undertook a number of derivative transactions in an attempt to reduce or avoid the corporation tax due on the gain.
As part of the scheme (which was devised by an accountancy firm) E sold one of the subsidiaries (Q) to an...
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Loan relationships: unallowable purposes and tax relief schemes
In Explainaway Ltd v HMRC (and related appeal) (TC01267 – 13 July) a company (P) held a large shareholding in another company (W).
It wished to sell half of these shares. In an attempt to avoid the corporation tax which would become due on the sale P sold the shares in March 2001 to a newly acquired subsidiary (E).
In April 2001 E sold those shares in the open market realising a chargeable gain of £8 595 731.
In November 2001 E incorporated three subsidiary companies. E and its subsidiaries then undertook a number of derivative transactions in an attempt to reduce or avoid the corporation tax due on the gain.
As part of the scheme (which was devised by an accountancy firm) E sold one of the subsidiaries (Q) to an...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
