Upper Tribunal Tax and Chancery Chamber

[2025] UKUT 00314 (TCC)

Fecha: 24-Oct-2024

The Grounds of Appeal

The Grounds of Appeal

The four grounds set out in the Applicants’ application are as follows:

(1)

Ground 1: The FTT erred in its approach to determining whether the Payment was “from” Mr Mellor’s directorship with EAL. In particular:

(a)

The FTT asked itself the wrong question and thereby failed to have regard to key factors in determining whether the Payment was “from” Mr Mellor’s employment;

(b)

The FTT erroneously focused on EAL’s entitlement under the Consultancy Agreement rather than the reasons for which the Payment was made to Mr Mellor personally;

(c)

The FTT wrongly decided that the Payment must be employment income in the absence of the identification of some other instrument or mechanism whereby Mr Mellor if not rewarded for his services was still seeking to vindicate his reward; and

(d)

Insofar as the FTT’s conclusion was founded on findings of fact the findings were contradictory, unsupported by the evidence or inadequately reasoned.

(2)

Ground 2: The FTT erred in deciding the following matters which were not in dispute between the parties and on the Appellants had not provided any submissions:

(a)

The application of ss 401- 406 ITEPA 2003; and

(b)

The scope of the exemption from CGT under s 51(2) TCGA 1992.

(3)

Ground 3: The FTT erred in determining that the whole of the Payment was a distribution. In particular:

(a)

The Payment was not “in respect of the shares in” any company;

(b)

The FTT failed to take into [account] factors relevant to determining whether the Payment was a distribution;

(c)

The Payment was not made “out of the assets” of EAL; and

(d)

Even if the Payment were a distribution, the amount of the distribution depended on its value as at 15 May 2017.

(4)

Ground 4: The FTT erred in determining that if the Payment was not earnings from his employment and not a distribution it would nevertheless be taxable as miscellaneous income.

(a)

The FTT mischaracterised the Payment as income in Mr Mellor’s hands;

(b)

There was no analogous head of charge; and

(c)

The FTT did not identify the source of the Payment.

As mentioned above, this hearing considers Ground 1(c) only.