Clipperton & anr (appellants) v HM Revenue and Customs (respondent)
Tuesday 16 January 2024
By appellant’s notice filed on 9 February 2023, the Appellants appeal the decision of the Upper Tribunal (Tax and Chancery Chamber) dated 20 December 2022.
Background – HMRC assessed the Appellants to income tax on sums which they received in 2011/12 from arrangements involving a company of which they were the sole shareholders and directors. The Appellants appealed against the assessments to the First-tier Tax Tribunal (“FTT”). The FTT held that the sums in question were liable to income tax as distributions (the “distribution issue”), but, if that were wrong, would not have been liable to tax in the hands of the Appellants under the settlements legislation.
With the permission of the FTT, the Appellants appealed against the FTT’s decision in relation to the distribution issue, and against certain aspects of the FTT’s decision in relation to the settlements code. With the permission of the FTT, HMRC cross-appeal against the FTT’s decision that the amounts would not have been taxable on the Appellants under the settlements legislation. The Upper Tribunal dismissed the Appellants’ appeal and allowed HMRC’s appeal.
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