Grays Timber Products Limited (Appellants) v Her Majesty's Revenue and Customs (Respondents) (Scotland)

Case summary

Case ID

UKSC/2009/0044

Parties

Appellant(s)

Grays Timber Products Limited

Respondent(s)

Her Majesty's Revenue and Customs

Issue

(1) Whether the disposal of shares in Gray's Group Limited by a director was a disposal giving rise to a charge to tax on employment income in terms of section 446Y of the Income Tax (Employment and Pensions) Act 2003 (as amended by Finance Act 2003) and; (2) Upon what basis the market value of those shares is to be determined for the purposes of section 446Y.

Facts

Mr Alexander Gibson, a director of the Appellant company, held 5% of the total issued share capital but was entitled under the terms of a subscription agreement to receive approximately 25% of the sale proceeds, which was significantly more per share than any other shareholder. When the group's entire share capital was sold to a third party and Mr Gibson was paid 25% of the proceeds, the Respondent determined that the disposal of the shares were for a consideration that exceeded "the market value of the employment-related securities at the time of the disposal" within the meaning of section 446Y ITEPA 2003. The Appellant company appealed, contending that the shares were sold for their market value so that the whole of the consideration received by Mr Gibson fell to be brought into computation of his capital gain under the Taxation of Chargeable Gains Act 1992. The Appellant further contended that the best evidence of market value was what was paid for the shares.

Date of issue

8 May 2009

Judgment appealed

Judgment details

Judgment date

3 February 2010

Neutral citation

[2010] UKSC 4

Judgment links

Judgment summary

3 February 2010

Appeal

Justices

Hearing dates

Full hearing

Start date

14 December 2009

End date

15 December 2009

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