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Payments on termination were not exempt as compensation for loss of office

By Mark McLaughlin, February 2025

Payments to directors who had resigned voluntarily were taxable earnings and were not exempt payments of compensation for loss of office.  

The appellant companies (S and A) were connected with a limited liability partnership (R). The directors were all limited partners in R. S was a limited partner in R between January 2013 and March 2015. A (incorporated in 2006) was also briefly a limited partner in R. In 2010, when R was formed, a further company (S8) was formed as a holding company. A was owned by S8, and S8 was owned by R. R’s business was the promotion of tax arrangements; the appellants participated in them.  

The appellants appealed against notices of determination under SI 2003/2683, reg 80 and notices under SSC(TF)A 1999, s 8 in respect of tax years from 2015/16 to 2018/19. The determinations and section 8 notices related to payments made to five directors of S and A on the termination of their respective

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