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Look at the agreement

24 March 2009
Issue: 4199 / Categories: Tax cases , Capital Gains
CRC v Collins, Chancery Division, 20 February 2009

The taxpayer who was reaching retirement agreed to sell his company to a third party.

The purchaser paid around £15 000 to the taxpayer for his shares and also agreed to pay approximately £95 000 to the company.

The purchaser would then ensure that the company would make a pension contribution of £120 000 on the taxpayer’s behalf.

The taxpayer declared the sale of his shares in the company in his 1998-99 tax return but did not include the £95 000. He paid capital gains tax of over £15 000.

A few years later the taxpayer wrote to HMRC explaining that because certain liabilities relating to the sale had only just been settled and were much lower than anticipated his capital gains tax bill was reduced and he claimed a prepayment.

HMRC refused on the ground that the pension contribution of £95...

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