Since 1927 the leading authority on tax law, practice and administration

The Dependent Subsidiary Trap

© Copyright LexisNexis 2024. All rights reserved.

28 August 2002 / Malcolm Gunn

Issue: 3872 / Categories: Comment & Analysis , IR35

MALCOLM GUNN FTII, TEP discusses an easily overlooked tax charge on share acquisitions by directors and employees.

SAD TO SAY no one has ever given me any shares in a company with a view to their pouring massive value into those shares afterwards leaving me to sell up at some later stage with a nice fat profit. I am still open to offers but in the meantime I am left to turn green with envy at any such lucky individuals. However unlikely this scenario may sound to people like me there are apparently some out there who have enjoyed exactly this type of good fortune so that there is a particular Schedule E section designed to collect tax on their profit. Most of me wanted to say 'jolly good show too' to help compensate for my missing out but I decided to allow the remaining little bit of me to hold sway while I write this article.

That...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

The Dependent Subsidiary Trap

© Copyright LexisNexis 2024. All rights reserved.

28 August 2002 / Malcolm Gunn

MALCOLM GUNN FTII, TEP discusses an easily overlooked tax charge on share acquisitions by directors and employees.

SAD TO SAY no one has ever given me any shares in a company with a view to their pouring massive value into those shares afterwards leaving me to sell up at some later stage with a nice fat profit. I am still open to offers but in the meantime I am left to turn green with envy at any such lucky individuals. However unlikely this scenario may sound to people like me there are apparently some out there who have enjoyed exactly this type of good fortune so that there is a particular Schedule E section designed to collect tax on their profit. Most of me wanted to say 'jolly good show too' to help compensate for my missing out but I decided to allow the remaining little bit of me to hold sway while I write this article.

That...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

Issue:

3872

Categories: Comment & Analysis [1] , IR35 [2]

SourceURL:

Links:

READERS' FORUM premium icon

Tax tip: National Insurance contributions Readers’ forum: Treatment of shares in freehold on disposal Readers’ forum: Sale of personal collection of rare dolls Readers’ forum: HMRC’s attitude to failed R&D claim Readers’ forum: Order of reliefs after donor’s unexpected death

FIVE WAYS TO MAKE ACCOUNTS PRODUCTION AND TAX EASIER.
Download the exclusive Xero
free report here.

New queries

Please email any questions you might have
to: taxation@lexisnexis.co.uk.

NEWS

Returns submission when exempt from MTD for VAT Spotlight targets disguised employment income scheme Massive hike in VAT receipts in 2023-24 EU council agrees on VAT in the digital age package Private schools challenge VAT on fees

Third slide

Deadline dates for December 2024

CASES

Recovery of an invalid refund Interactions with HMRC’s online system Expenditure was not subsidised Legitimate expectation after HMRC instruction Failed sub-sale scheme results in higher liability

MOST POPULAR

This week's opinion: 14 November 2024 Returns submission when exempt from MTD for VAT Spotlight targets disguised employment income scheme Massive hike in VAT receipts in 2023-24 EU council agrees on VAT in the digital age package

back to top icon