In NP Grogan v HMRC (Upper Tribunal – 12 November) a company (N) established a ‘qualifying employee share ownership trust’ within FA 1989 s 67. N’s controlling shareholder (G) had a substantial loan account with N which would give rise to a corporation tax liability under what is now CTA 2010 s 455 unless it were repaid. G sold 15 750 shares to the trust for £630 000 (reducing his shareholding from 82.2% to 63.8%). HMRC subsequently issued a notice to G under ITA 2007 s 698. G appealed contending that he had not sold the shares for the purpose of obtaining a ‘tax advantage’.
The First-Tier Tribunal reviewed the evidence in detail rejected this contention and dismissed G’s appeal. Judge Wallace held that ‘the relevant tax advantage was the receipt by the appellant of £630 000...
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In NP Grogan v HMRC (Upper Tribunal – 12 November) a company (N) established a ‘qualifying employee share ownership trust’ within FA 1989 s 67. N’s controlling shareholder (G) had a substantial loan account with N which would give rise to a corporation tax liability under what is now CTA 2010 s 455 unless it were repaid. G sold 15 750 shares to the trust for £630 000 (reducing his shareholding from 82.2% to 63.8%). HMRC subsequently issued a notice to G under ITA 2007 s 698. G appealed contending that he had not sold the shares for the purpose of obtaining a ‘tax advantage’.
The First-Tier Tribunal reviewed the evidence in detail rejected this contention and dismissed G’s appeal. Judge Wallace held that ‘the relevant tax advantage was the receipt by the appellant of £630 000...
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