UUÂãÁÄÖ±²¥

Weekly case highlights ― 17 March 2025

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Weekly case highlights ― 17 March 2025

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

Income tax

Lynch v HMRC

This are a number of distinct features in this case, and it should be studied carefully by all who are interested in the courts’ approach to tax avoidance.

The taxpayer here took part in several rounds of a marketed avoidance scheme which was designed to produce a loss in the form of interest relief. It was however accepted by all parties that the interest relief claim failed because it was caught by the main benefit test.

The dispute was about the interest receivable element of the scheme. The taxpayer argued that the entire structure should be disregarded on Ramsay grounds and therefore no tax liability arose on the interest. HMRC disagreed and applied what the court called a ‘single transaction view’ under which it argued that the interest received (which took the form of a discount) should be treated separately. There was, it argued, no reason to disregard this taxable income because of the failure to obtain interest relief.

The tribunal agreed and accepted that a tax charge arose.

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Powered by
  • 17 Mar 2025 15:10

Popular Articles

Trade or hobby

Trade or hobbyInteraction of hobby farming rules and commercialityFarming has its own set of ‘hobby farming rules’, which historically have stated that a profit must be made every six years. This is known as ‘the five-year rule’, in that there can be five years of losses but there must be a profit

14 Jul 2020 13:50 | Produced by Tolley Read more Read more

Indexation allowance and rebasing

Indexation allowance and rebasingThis guidance note explains the general rules surrounding the availability of indexation allowance (which was frozen at December 2017) on the disposal of company assets and provides information on the rebasing rules for assets held on 31 March 1982. For an overview

14 Jul 2020 11:59 | Produced by Tolley in association with Jackie Barker of Wells Associates Read more Read more

Maintenance payments

Maintenance paymentsMaintenance payments are payments made by a taxpayer to their former or separated spouse / civil partner for the maintenance of that person or their children. To obtain any tax relief for maintenance payments, one of the couple must have been born before 5 April 1935 and the

14 Jul 2020 12:12 | Produced by Tolley Read more Read more