The taxpayer had acquire by allotment a proportion of the issued share capital of a company and later sold half back. The respondent sought to bring in to the tax return the associated receipts.
Held: The effect of section 208 was to exclude from Corporation Tax all distributions of a UK company, save those otherwise expressly provided for. The effect of the repurchase was the cancellation of the shares. For tax on chargeable gains, the word ‘disposal’ must bear its ordinary meaning (Berry). The contract was a sale of shares. Notwithstanding that upon completion the shares would be cancelled, the share sale did not give rise to a liability for Corporation Tax in respect of any capital gain realised by virtue of section 208.
Judges:
The Honourable Mr Justice Etherton
Citations:
Times 25-Feb-2003, [2003] EWHC 67 (Ch), [2003] BTC 344, [2003] STI 204, [2003] STC 331
Links:
Statutes:
Income and Corporation Taxes Act 1988 208
Jurisdiction:
England and Wales
Corporation Tax
Updated: 11 April 2022; Ref: scu.179791
