Bamberg v Revenue & Customs [2010] UKFTT 333 (TC) (14 July 2010)

Bamberg v Revenue & Customs [2010] UKFTT 333 (TC) (14 July 2010)

Section 703 applies to the repayment of WCL’s loan stock to the appellant up to the amount of TTEL’s distributable reserves prior to the hive-down, as these assets represented profits available for distribution by way of dividend. The exclusion in C(2) is not limited to foreign companies but does not prevent the application of Circumstance D in this case. However, repayments out of profits made by WCL after the hive-down are not caught by section 703, as those profits were not available assets of TTEL.

Citation
[2010] UKFTT 333 (TC)
Parties
Appellant: Marcus Bamberg; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
14 July 2010
Procedural Posture
Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed in part and allowed in part
Legal Topics
Income Tax, Corporation Tax, Anti Avoidance, Transactions in Securities, Distribution of Profits, Loan Stock Repayment
Tax Law Company Law Income Tax Corporation Tax Anti Avoidance Transactions in Securities Distribution of Profits Loan Stock Repayment

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Parties

Marcus Bamberg

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether section 703 of the Taxes Act 1988 applies to the transactions in question
  2. 2 Whether the repayment of loan stock is caught by Circumstance D
  3. 3 Whether the exclusion in C(2) applies to UK companies

Ratio Decidendi

Section 703 applies to the repayment of WCL’s loan stock to the appellant up to the amount of TTEL’s distributable reserves prior to the hive-down, as these assets represented profits available for distribution by way of dividend. The exclusion in C(2) is not limited to foreign companies but does not prevent the application of Circumstance D in this case. However, repayments out of profits made by WCL after the hive-down are not caught by section 703, as those profits were not available assets of TTEL.

Court Disposition

Appeal dismissed in part and allowed in part

Orders

  • Appeal dismissed up to the amount of distributable reserves of TTEL until the hive-down
  • Appeal allowed in respect of any further profits made by WCL after the hive-down