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Non cash benefits for shareholders

What is the legal framework for taxing non-cash benefits given to shareholders

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A for-profit sports club with the legal structure of a limited company limited by shares is raising funds for new premises from issuing new ordinary shares to a few of its existing clients. The offer to investors includes lifetime free annual membership (normal price is £300 - £400 per year ex. VAT). Currently 100% of issued share capital owned by sole director, and he is looking to dilute down to 65%.

a) Is this taxable income on the investor?

b) What are the VAT implications?

The arrangement does not seem to be a  dividend in specie, and there are no real incremental costs (just foregone income).

Technical references to relevant legislation or HMRC manuals much appreciated!

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