Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Payment to director was not deductible

28 September 2021
Issue: 4810 / Categories: Tax cases
Shinelock Ltd (TC8261)

The taxpayer bought a property in March 2009 for £725 000 and sold it for £1.03m in December 2014. The day after the sale £305 000 was paid to A.

The purchase was funded from a combination of a bank loan and funds provided by A the sole shareholder of the taxpayer.

The taxpayer did not include any chargeable gain in its self-assessment tax return for the year ended March 2015.

After an enquiry HMRC concluded the taxpayer had realised a chargeable gain on the disposal of the property which was subject to corporation tax and amended the tax return.

During the enquiry the taxpayer argued that the property had been beneficially owned by A (who was non-UK resident at the time). However at the hearing the taxpayer said it had been the beneficial owner but the payment was deductible on the basis that it had a...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon