Readers' forum : Overpaid

My client was one of several shareholder/directors of company A. A few years ago they sold company A to company B (which was unrelated) for a substantial sum that was paid in several instalments. They paid tax on the full sale value after the first instalment was paid although the final instalment was never made.

Three years later company B made a claim against the shareholders of company A. This resulted in lengthy discussions involving counsel but to avoid going to court a settlement was reached. The shareholders of company A agreed to repay some of the proceeds to company B.

What happens to the tax paid by the shareholders of company A? Is HMRC likely to agree to a refund – especially as the final settlement was reached more than four years after the sale? Also would they be able to claim any...