Jurisdiction(s):
United Kingdom

Business Investment Relief lost due to director’s loan: extraction of value construed purposively; arm’s-length exemption fails; A1P1 challenge dismissed (D’Angelin v HMRC, UK FTT (Tax))

Published on: 15 July 2024

Published by a LexisNexis Private Client expert

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Article summary

D’Angelin v Revenue and Customs Commissioners [2024] UKFTT 462 (TC)

What are the practical implications of this case?

The judgment is notable for its treatment of value extraction and the circumstances in which BIR can be forfeited. Inflated pay or private enjoyment of corporate assets will be regarded as taking value out and thus violating the conditions for the relief. Beyond that, the ruling is valuable because it sets out firm direction on interpreting other provisions within tax statutes. The Tribunal examined the legislative purpose, drew on parliamentary materials to aid construction, and assessed whether its reading conflicted with Protocol 1 Article 1 of the European Convention on Human Rights (Protection of Property) (the Convention). This required weighing the appellant’s ‘right not to be deprived of the money that he will have to pay by way of tax if BIR is withdrawn’ (a Convention right) against the State’s entitlement to implement laws it considers necessary to regulate the use of property in the general interest or to ensure taxes are collected. It therefore clarifies both the limits of the relief and the proper approach to statutory interpretation generally...

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