Chalcot Training Ltd v Ralph and HMRC

In Chalcot Training Ltd v Ralph and HMRC [2020] EWHC 1054 (Ch) (5 May) the High Court considered a company’s application to set aside a tax avoidance scheme which it had implemented for its director shareholders (the Blackstar E share scheme) on the grounds that the scheme was unlawful under company law.

The company claimed that the transactions should be characterised as unlawful distributions to shareholders rather than remuneration to directors/employees (as they were described) and that they also breached the Companies Act 2006 in relation the issue of shares at a discount and the payment of commissions. The company also claimed that the transactions should be unwound and the company placed back into the position that it would have been had the Blackstar E shares scheme never been entered into. HMRC opposed this claiming that the company was bound by the transactions it had...

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