Member Since: 15th Jul 2010
Barrister Temple Tax Chambers
18th Sep 2019
It may be a matter of semantics whether something is unlawful or illegal (unlawful is against the law, illegal is a very sick bird). But s847 Companies Act 2006 is "consequences of an unlawful distribution" which implies you can have a distribution (dividend) which is unlawful (illegal) otherwise there would be no consequence. The obligation is to repay which does not make it a loan. It is held on constructive trust and therefore does not form part of the income. S455 is payable because there has been an advance not a loan. Practically the result may be the same.
18th Sep 2019
The legislation talks about a loan or an advance. Therefore if the dividend is illegal it is held on constructive trust; however, there has still been an advance and so s455 is still applicable.
In general, the directors ought to know the financial situation of the company and where the shareholders are the directors of the company it is difficult to argue that they were not aware or ought not to have been reasonably aware of the situation.
In my opinion, both HMRC and Justin are right!
31st Jul 2019
A partnership is a business carried on in common with a view to profit; Consequently, it will make either a profit or a loss. In a joint venture (which I agree doesn't legally exist) it would be possible for one party to make a loss and the other a profit.
If the local authority asked for someone to tender for the construction of a playground it would be possible for two people to tender on the basis that one does the tarmac and one does the climbing frame. They tender for a single fee and split it 2/3rds 1/3rd. If the tarmac overruns on costs they make a loss and the climbing frame makes a profit. There is a contractual joint venture but no partnership. Each accounts separately.
2nd Jul 2019
When you transfer chargeable securities there are two charges arising: first, a charge to SDRT; and secondly a charge to stamp duty. The charge to SDRT is franked by the payment of stamp duty. The stamp duty charge is eliminated by a claim to relief from duty under s77, FA 1986.
So do you have an interaction of SDRT with stamp duty? ... yep. Stamp duty has to be paid within 30 days. So in theory you need to make the claim within 30 days to get rid of the duty and frank the SDRT. There may be interest and penalties for late submission but generally a successful claim to s77 will clear everything up. And SDRT does have a six year period.
5th Nov 2018
You're right. Section 251 says no gain on the disposal by original creditor unless it's a debt on a security. If it's not the original creditor then there is a gain as it is an asset. Only exception would be where you're acquiring on trading account.
But I think you knew that :)