Biggart Baillie leads the Scottish Charge to the UK Supreme Court
Friday, December 11, 2009
Leading Scottish law firm, Biggart Baillie LLP, will be amongst the first Scottish solicitors to take a case to the new UK Supreme Court. The case of Gray’s Timber Products Limited v HMRC will be heard on Monday 14 and Tuesday 15 December 2009. This will be the first Scottish civil non-devolution case to be heard by the Court.
It is a case that has attracted a great deal of interest among the UK taxation fraternity.
Gray’s Timber Products Limited v HMRC is an appeal of a decision of the Inner House of the Court of Session. The case turns on whether, when an individual sold his shares in a company, as part of a sale of the entire share capital of that company, he received more than market value for those shares.
The taxpayer contends that the market value of the shares sold by him was in line with what he was entitled to receive for them in terms of a Shareholders Agreement.
HMRC contend the rights in the Shareholders Agreement were personal to him, did not attach to the shares and, as a result, the shares were sold for a consideration in excess of their market value. On this basis, HMRC further contend that this excess consideration should properly be taxed as income rather than a capital gain.
The majority decision of the Inner House was to refuse the taxpayer’s appeal, however Lord Osborne, in the Chair, dissented.
The decision of the Supreme Court is expected within 12 weeks of next week’s hearing.
If the decision finds in favour of the taxpayer, it would overturn the hypothesis that sale consideration for shares can only be allocated effectively for tax purposes by creating separate classes of shares at the outset.
Additional comments on the progress of this ground breaking case can be obtained directly from Ronnie Brown or Jennifer Spence.