Tax cases

Legal benefits

The taxpayer was managing director of a computer company formed in 1986. In 1992 L joined as office manager and she was given a 5% shareholding in the company. In 1994 a new service contract was drafted entitling L to part of the company's profits. The issued share capital was increased from 100 shares to 50 000 and L was given 2 495 shares which the taxpayer paid for. Two years later the relationship between the taxpayer and L deteriorated. Two claims were subsequently issued in the country court against L by the company and the taxpayer and L brought a counter claim. These were settled with the net result that the company had to pay L £6 773. The company also brought claims against their solicitors for costs incurred in the years 1998-99 2000-01 and 2001-02. The taxpayer was...