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Benoit D’Angelin v HMRC

If a non-domiciled individual invests money into a UK company the Business Investment Relief rules allow the transfer of the funds not to be treated as taxable remittance. However, the relief is withdrawn if the individual extracts value from the company. Here the individual invested £1.5m into the company and obtained relief. He then used the company to meet personal expenses and similarly paid personally for expenses incurred on behalf of the company. These amounts were dealt with in a loan account. Each year there was balance on the loan account owed by the individual to the company in amounts ranging from a few hundred pounds through to over £70K. HMRC regarded this as an extraction of value and issued an assessment to bring the whole of the £1.5m into charge. The relief operates on an all or nothing basis, so any extraction of value brings the whole of the amount invested back into charge, not just the amount of value which has been extracted.

The taxpayer’s appeal