New Judgment: Gray’s Timber Products Ltd v HMRC  UKSC 4
03 Wednesday Feb 2010
On appeal from:  CSIH 11
Shares in the company had been disposed of by director and sold to third party as whole share capital of company. A subscription agreement provided for payment to director of higher proceeds of sale than other shareholders. The question before the court was whether the taxation of the proceeds of sale should be regarded as on income under the Income Tax (Earnings and Pensions) Act 2003. The main issue was whether, under the test laid out in s 446X of the 2003 Act, the disposal of the shares had been for a price which exceeded the market value of the shares at the time of the disposal. The Supreme Court dismissed the company’s appeal, unanimously, holding that the proceeds were income under the Act, and must be taxed accordingly.