In July 2004 the taxpayer who was a banker incorporated a company to trade in sports history books and memorabilia. His wife was appointed sole shareholder and director because his employer did not permit external directorships. The taxpayer invested £3.45m in the business by way of unsecuritised non-interest bearing loans.
The company had some success but by 2012 it had become unsustainable. In 2013 the company and the taxpayer entered into an agreement for the capitalisation of the loan. The company issued 2 200 000 ordinary £1 shares to the taxpayer who agreed to ‘fully and irrevocably release and discharge any claims or demands’ he may have against the company. The aim was to enable the taxpayer to claim income tax losses under ITA 2007 s 131 on the basis that the shares had negligible value which he did in his return...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
