In Explainaway Ltd v HMRC (and related appeals) (Upper Tribunal – 25 October) 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 unconnected third party in 2002 and claimed a capital loss of...
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In Explainaway Ltd v HMRC (and related appeals) (Upper Tribunal – 25 October) 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 unconnected third party in 2002 and claimed a capital loss of...
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