In Shinelock Ltd v HMRC [2023] UKUT 107 (TCC) (15 May 2023) the Upper Tribunal (UT) dismissed the appellant’s appeal finding that a payment to a shareholder (calculated by reference to the capital gain arising on disposal of a property) constituted a distribution in respect of a ‘special security’ for the purposes of CTA 2010 s 1000 para F on the basis it was results-dependent. Accordingly the appellant was precluded from claiming a loan relationship debit in respect of the payment.
The appellant acquired the property in question in March 2009 with the shareholder (an individual) making payment of the deposit for the acquisition from his own resources but with the appellant being registered as the owner of the property. The appellant and the shareholder made a verbal agreement that on disposal of the property the appellant would make a payment to the shareholder equivalent to the capital...
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