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S Baylis (TC5454)
Tax treatment of care home fees paid by a company
A family company paid the care home fees of Mrs B whose daughter (the taxpayer) was an employee and husband was majority shareholder and managing director. HMRC said the taxpayer had contracted personally with the care home but the company met her liability to pay the fees and so a taxable benefit arose on her. The taxpayer said she had contracted as agent for the company and the benefit was taxable on her father.
The questions for the First-tier Tribunal were:
- whether the husband had authorised the company to pay the care home fees;
- whether he had authorised the taxpayer to act as agent; and
- if so whether she was acting in that capacity when she signed the contract.
The tribunal judge said from the...
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