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) – Substantive Judgment After Remote Video Hearing

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 a capital amount derived from Mr Grint's activities and was taxable as income under the provisions in the 2011/12 tax year. The requirements for s 779 to apply were met, and the closure notice was validly issued.

Court Disposition

Appeal dismissed

Orders

• The appeal is dismissed. The closure notice and HMRC's amendment to Mr Grint's tax return for 2011/12 are upheld.