This case concerned the date on which a debt had been released so as to trigger a tax charge under ITTOIA 2005, s. 415 (England & Anor v HMRC [2023] UKFTT 313 (TC)).
The charge under s. 415 arises where a company that had a liability under CTA 2010, s. 455 (loans to participators) releases or writes off the loan.
The fact that HMRC had assessed the liability as arising in 2013-14 did not influence the question. Nevertheless:
“The Tribunal decided that the settlement agreement entered into did amount to a release of the £909,063.00. The release did occur at the time of the execution of the deed because of the wording of the clauses. The agreement was fully and effectively binding at that date. The obligation under the agreement in respect of the Liquidator was to release the Appellants from repaying the Director’s loans of £909,063.00. There was a positive obligation under the agreement in respect of the Liquidator making the release. The payment of the settlement sum of £100,000.00 was in full and final settlement of the Liability and of all known causes of action that the Liquidator may have against the Appellants. The wording was plain and clear. The liability was released at the point of execution of the agreement and is taxable in the tax year 2013-14.”
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08770.html
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