The meaning of the term ‘ordinary share capital’ is important for a wide range of purposes within the UK tax code. The definition is generally broad but excludes shares which give a right to a dividend at a fixed rate and no other right to a dividend. The FTT in the recent case of Warshaw v HMRC has had the opportunity to consider this restriction and has held that cumulative preference shares were not caught by the exclusion. This goes against recently stated HMRC policy in the area and, as such, is a decision that should be approached with some caution as it will, most likely, be appealed by HMRC.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
The meaning of the term ‘ordinary share capital’ is important for a wide range of purposes within the UK tax code. The definition is generally broad but excludes shares which give a right to a dividend at a fixed rate and no other right to a dividend. The FTT in the recent case of Warshaw v HMRC has had the opportunity to consider this restriction and has held that cumulative preference shares were not caught by the exclusion. This goes against recently stated HMRC policy in the area and, as such, is a decision that should be approached with some caution as it will, most likely, be appealed by HMRC.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
90a1d87b-c1b5-43c3-a720-cd324830adee.tmb-editorspic.jpg?sfvrsn=1b2d0a7e_1)
