UT (Tax & Chancery) UT/2023/000098 - [2024] UKUT 00404 (TCC)

M R Currell Limited (the “Appellant”) has appealed against the decision of the First-Tier Tribunal (“FTT”) (M R Currell Limited v HMRC [2023] UKFTT 613 (TC)) (the “Decision”) in which the FTT dismissed the Appellant’s appeal against:

The facts are set out in our summary of the Decision below, but essentially concern a payment of £800,000 (the “Payment”) which was made by the Appellant to the trustee (the “Trustee”) of the M R Currell Limited Employee Benefit Trust (the “EBT”) in November 2010 and which was then lent (the “Loan”) by the Trustee to Mark Currell (“MC”), a director and shareholder of the Appellant. The FTT concluded that there were taxable earnings in the amount of £800,000 (although before us the parties disagreed as to whether it was the Payment or the Loan which had been found to be earnings) and the Appellant’s appeal was dismissed.

The FTT granted the Appellant permission to appeal on the ground that “the Tribunal erred in law in concluding that the Payment constituted earnings in the amount of £800,000 under s62(2)(b). In particular, the FTT has erred in law in holding that the principal of the loan constituted a reward or benefit within the meaning of s62(2)(b)”.

We are grateful to Mr Elliott and Mr Waldegrave for their written and oral submissions, which we found most helpful. We have not referred expressly to all of those submissions in this decision but we have taken them all into account.

References below in the form [x] are to paragraphs of the Decision unless the context otherwise requires.