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The director of a Swiss company was awarded shares and paid UK income tax on them. A dividend has been issued on the shares, and has been described as a return of capital to shareholders
My client has been awarded shares in a Swiss company of which he is a director. Over the past few years he has paid income tax (UK top rates after double tax relief) as an employee on a total value of £1.8m which is therefore his base cost for capital gains tax.
This year the company has paid out an amount which could be a dividend but it has described this in its accounts as a “return of capital to shareholders”; not apparently income for shareholders under Swiss law.
I believe that if this was a UK company HMRC would regard this as chargeable to income tax unless special procedures applied; but is that the case if the company is foreign?
Because the value of the shares has fallen if my client works out A/(A+B) on the £55 000 receipt...
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