Jurisdiction(s):
United Kingdom

Beard v HMRC: UKUT holds Jersey share premium distributions taxable as income, not ‘dividends of a capital nature’, under ITTOIA 2005 s 402(4); character determined by Jersey company law

Published on: 16 April 2024

Published by a LexisNexis Tax expert

Legal News

Article summary

Beard v Revenue and Customs Commissioners [2024] UKUT 73 (TCC)

What are the practical implications of this case?

On 22 March 2024, the Upper Tribunal (Mr Justice Roth and Judge Jennifer Dean) determined that the First-tier Tax Tribunal (Judge Rachel Short) had rightly concluded that approximately £150m of distributions paid over a continuous five-year period to Mr Alexander Beard, a UK resident, by Glencore plc—a company incorporated in Jersey and domiciled in Switzerland—were chargeable to income tax in his hands for UK tax purposes, and did not amount to ‘dividends of a capital nature’ within section 402(4) of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005). As a result, the particular planning implemented by Mr Beard, which aimed for the payments to be treated under the capital gains tax regime, did not, subject to any further appeal, achieve the desired outcome. This ruling will interest those advising UK resident clients with substantial shareholdings in non-UK resident companies. It provides a useful analysis of...

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