In R T Patel and two others v HMRC [2016] UKFTT 78 (9 February 2016) the FTT found that a payment made to a company was not deductible for CGT purposes and did not qualify for entrepreneurs’ relief.
Mr Patel his mother and his wife were the sole shareholders of a company which had run a hotel; however the hotel property itself had belonged to them personally. The hotel had subsequently been demolished and a block of flats built in its place. The company had received 50% of the disposal proceeds when the property and flats had ultimately been sold. At the time of the disposals the appellants had paid £395 000 to the company. One of the issues was whether this amount was deductible when computing the appellants’ gain on the disposal of the property.
The Patels contended that the amount represented enhancement expenditure on...
