Waiver of right to enforce debt

In March 2016 Regis Group (Holdings) Ltd decided to pay an interim dividend of £40m to its two shareholders who were brothers. It paid £20m to one shareholder on 5 April 2016 and £20m to the taxpayer on 16 December 2016.

The taxpayer claimed the dividend was taxable in the year it was paid – 2016-17. He was non-UK resident that year so it would not be subject to UK tax.

After an enquiry HMRC issued a closure notice on the basis that the dividend was taxable in 2015-16. The First-tier Tribunal allowed the taxpayer’s appeal confirming that the dividend was subject to tax when it became due and payable – in this instance in 2016-17. HMRC appealed.

The Upper Tribunal said it was common ground that a dividend was ‘due and payable’ for the purposes of CTA 2010 s 1168(1) when the shareholder had...