In A Allam v HMRC [2020] UKFTT 26 (TC) (15 January) the FTT considered three complex appeals relating to transactions with companies which the taxpayer owned.
Two of the appeals related to the sale by Dr Allam of the entire shareholding in ADL to AML. AML was a wholly-owned subsidiary of Allamhouse which was owned by Dr Allam and his wife. ADL’s business involved holding developing and leasing properties.
Dr Allam claimed entrepreneurs’ relief in respect of the sale of the shares. HMRC rejected the claim on the basis that the company was not a ‘trading company’ because its activities involved non-trading activities to a substantial extent. HMRC argued in accordance with their guidance that ‘substantial’ meant more than 20% by reference to certain attributes of the business. Dr Allam contended that for the test not to be met the non-trading activities should predominate or be at least 50%.
The FTT concluded that there was no...
