HMRC v R Sehgal and another

In HMRC v R Sehgal and another [2024] UKUT 74 (TCC) (25 March 2024) the Upper Tribunal (UT) upheld the decision of the First-tier Tribunal (FTT) that arrangements under which the taxpayers settled a debt indemnity arising from a share sale did not give rise to a remittance to the UK.

The taxpayers were UK-resident non-domiciled individuals who claimed the remittance basis. They sold their shares in a company (VGL) to a Luxembourg resident company (CLS). At the time of the sale another company (IRL) indirectly owned by the taxpayers via a Jersey company (SKS) owed VGL’s subsidiary £6m and under the share purchase agreement the taxpayers provided an indemnity in respect of the debt. Shortly after the sale it became clear that the debt could not be recovered so that the indemnity would be triggered. At the request of CLS’s parent company a series...

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