Jeanette Zaman considers the decision of the First-tier Tribunal that a payment for a non-compete agreement is capable of benefitting from the substantial shareholding exemption
It is somewhat unusual for a taxpayer to rely on an argument before a tribunal that the contractual documentation reflects an artificial device and that its form should therefore be disregarded – it must be even rarer for such an argument to succeed. The decision of the First-tier Tribunal in Williamson Tea Holdings Ltd v HMRC [2010] UKFTT 301 (TC) is interesting as it considers the tax treatment of what was described in a share purchase agreement negotiated between third parties as a payment for a non-competition agreement (NCA) but which the taxpayer argued was a disguised premium for the controlling shareholding of which it was disposing.
Facts in Williamson Tea
The taxpayer WTH agreed to sell its shares in its...
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Jeanette Zaman considers the decision of the First-tier Tribunal that a payment for a non-compete agreement is capable of benefitting from the substantial shareholding exemption
It is somewhat unusual for a taxpayer to rely on an argument before a tribunal that the contractual documentation reflects an artificial device and that its form should therefore be disregarded – it must be even rarer for such an argument to succeed. The decision of the First-tier Tribunal in Williamson Tea Holdings Ltd v HMRC [2010] UKFTT 301 (TC) is interesting as it considers the tax treatment of what was described in a share purchase agreement negotiated between third parties as a payment for a non-competition agreement (NCA) but which the taxpayer argued was a disguised premium for the controlling shareholding of which it was disposing.
Facts in Williamson Tea
The taxpayer WTH agreed to sell its shares in its...
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If you do not subscribe but are a registered user, please enter your details in the following boxes:
