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N S Philpott, D W Scott Law, D J McKillop, J B Law & V A Law (TC3969)
The taxpayers were directors of a company that set up a funded unapproved retirement benefits scheme (FURBS) in February 2006.
The business made a £34 000 cash contribution into the scheme on behalf of each director and transferred three parcels of development land.
The scheme paid lump sum tax-free payments of £3m £150 000 and £250 000 to three of the directors on their retirement in autumn 2006. It then became insolvent and was dissolved.
HMRC made an enquiry into the taxpayers’ returns which led to closure notices that increased the individuals’ taxable incomes to take into account the contribution of land to the FURBS. The Revenue ruled that the value of the properties should be divided equally between the taxpayers in accordance with ITEPA 2003 s 388.
The taxpayers appealed on the ground the transfer of property to the scheme had been not been made...
