The income tax provisions on the taxation of dividends of UK resident companies are a model example of the interaction between corporate law and tax law. Dividends of UK resident companies are subject to income tax in the hands of shareholders for the period in which payment of the dividend becomes enforceable. Whilst the the High Court judgment in Potel sets out the general principles determining the point at which each form of dividend becomes due and payable two recent tribunal decisions provide a helpful summary of the key issues arising where payment of dividends is deferred vis-à-vis other shareholders of the company. In Gould the FTT held that an enforceable debt did not arise in respect of an interim dividend in respect of which payment to one shareholder was deferred to a subsequent tax year rejecting a number of corporate law arguments made by HMRC. In...
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The income tax provisions on the taxation of dividends of UK resident companies are a model example of the interaction between corporate law and tax law. Dividends of UK resident companies are subject to income tax in the hands of shareholders for the period in which payment of the dividend becomes enforceable. Whilst the the High Court judgment in Potel sets out the general principles determining the point at which each form of dividend becomes due and payable two recent tribunal decisions provide a helpful summary of the key issues arising where payment of dividends is deferred vis-à-vis other shareholders of the company. In Gould the FTT held that an enforceable debt did not arise in respect of an interim dividend in respect of which payment to one shareholder was deferred to a subsequent tax year rejecting a number of corporate law arguments made by HMRC. In...
If you are not a subscriber, subscribe now to read this content.
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