Grint v Commissioners for His Majesty's Revenue and Customs (INCOME TAX - whether the "Sales of Occupation Income provisions" contained in ss.773 to 789 of Ch. 4 of Part 13 of the Income Tax Act 2007 apply to a capital sum received on the sale of assets/services to a company) [2024] UKFTT 956 (TC) (25 November 2024)

Parties

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax Chamber) Judgment

Legal Issues

1. 1 Whether the 'Sales of Occupation Income provisions' (ss 773-789, Income Tax Act 2007) apply to a capital sum received on the sale of assets/services to a company
2. 2 Whether the main object of the transactions was the avoidance or reduction of income tax under s 773(2)(b) ITA 2007
3. 3 Whether the capital sum should be treated as income under s 778 or s 779 ITA 2007

Ratio Decidendi

The tribunal found that the avoidance or reduction of income tax was one of the main objects of the transactions, satisfying the avoidance test in s 773(2)(b) ITA 2007. The right to £4.5 million consideration left outstanding as a debt was taxable as income under the provisions in the 2011/12 tax year, as the requirements for s 779 were met. The closure notice was validly issued. The appeal was dismissed.

Court Disposition

Appeal dismissed

Orders

• The appeal is dismissed.
• The closure notice and HMRC's amendment to the tax return stand.