In Williamson Tea Holdings Ltd v HMRC (TC00589 – 2 August) a company (W) agreed to sell its entire shareholding in a subsidiary company (B) to another company (M) for more than £17 500 000. HMRC accepted that this sale qualified for the ‘substantial shareholding’ exemption under TCGA 1992 Sch 7AC. Under the agreement M paid W a further sum of more than £3 700 000 in return for W agreeing to enter into a ‘non-competition’ agreement. HMRC issued an amendment to W’s return charging tax on the basis that this payment was a capital sum derived from a disposal of goodwill within TCGA 1992 s 22 and failed to qualify for the ‘substantial shareholding’ exemption. W appealed contending that the non-competition agreement had been ‘an entirely artificial device with a view to enabling (M) to pay a lower price to...
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In Williamson Tea Holdings Ltd v HMRC (TC00589 – 2 August) a company (W) agreed to sell its entire shareholding in a subsidiary company (B) to another company (M) for more than £17 500 000. HMRC accepted that this sale qualified for the ‘substantial shareholding’ exemption under TCGA 1992 Sch 7AC. Under the agreement M paid W a further sum of more than £3 700 000 in return for W agreeing to enter into a ‘non-competition’ agreement. HMRC issued an amendment to W’s return charging tax on the basis that this payment was a capital sum derived from a disposal of goodwill within TCGA 1992 s 22 and failed to qualify for the ‘substantial shareholding’ exemption. W appealed contending that the non-competition agreement had been ‘an entirely artificial device with a view to enabling (M) to pay a lower price to...
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