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Much ado about nothing
KEY POINTS
- Loan capital was converted into redeemable shares.
- Were the shares ‘ordinary share capital’ within the definition of ITA 2007 s 989?
- The shares did not have a right to a dividend.
- Possible unfairness can be addressed only by parliament amending the legislation.
Zero crops up all over the place in tax legislation as Andrew Hubbard explained in his article ‘Zilch nada zip’ (Taxation 26 May 2016). That article was prompted by the First-tier Tribunal decision in McQuillan (TC5074) in which the key point was the nature of zero-dividend shares. This prompted me to review the case in ‘This means nothing to me’ (Taxation 14 July 2016).
HMRC appealed and the Upper Tribunal has reversed the First-tier Tribunal’s decision. The case will I suggest decide once and for all...
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