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R and G Seesurrun (TC3900)
The taxpayers were a married couple who owned three companies that provided residential care to the elderly. They also owned the properties from which two of the companies operated.
The couple established settlements in the Isle of Man which acquired two locally incorporated companies Calinda and Mannville.
The taxpayers transferred the properties to Calinda and Mannville resulting in rents being paid to the firms – which declared dividends from the profits arising from the rents.
HMRC decided the dividends should be treated as taxable income by virtue of TA 1988 s 739 (now ITA 2007 s 720).
The taxpayers appealed.
The First-tier Tribunal said taxpayers were both creditors and debtors of Calinda and the sum owed was reduced by the dividend. There was also evidence to show the taxpayers had “power to enjoy the income of Calinda as a matter of fact”.
The...
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