The court has ruled that two care home owners, who sold their facility, cannot subtract debt payments from the share value and must pay capital gains tax on £8m
The First Tier Tribunal (FTT) has rejected an appeal from care home owners Michelle Mcenroe and Miranda Newman against closure notices from HMRC which stated that they had to pay capital gains tax (CGT) on the consideration of shares on £8m, which was the price of the sale, and not on £6.9m, which was left after they paid off a bank debt.
The duo were the owners of the care home Kingly Care Partnership Ltd (KCPL) where they were both 50% shareholders. During 2014, they sold the company and the sale and purchase agreement stated that the consideration for the 100% share ownership was £8m.
On the day of the sale, the buyers transferred the £8m to their solicitors. The solicitors then transferred £1.08m to Allied Irish Bank, where Kingly Care held some debt, to redeem the loan owed by the care home.
