Beard (Appellant) v Commissioners for His Majesty’s Revenue and Customs (Respondent)

Case summary

Case ID

UKSC/2025/0110

Parties

Appellant(s)

Alexander Beard

Respondent(s)

The Commissioners for His Majesty's Revenue and Customs

Issue

How should a court determine whether a corporate distribution is a “dividend of a capital nature” for the purposes of s.402(4) of the Income Tax (Trading and Other Income) Act 2005 (“ITTOIA”)?

Facts

Alexander Beard (“AB”), owns ordinary shares in Glencore plc, a company incorporated in Jersey. Between 2011 and 2016, AB received cash distributions from Glencore (“Cash Distributions”). In 2015, AB received one in specie distribution of shares in another company, Lonmin plc (“the Lonmin Distribution”). The total value of the Cash Distributions and Lonmin Distribution (together, the “Distributions”) was around £150 million. All of the Distributions were debited to Glencore’s share premium account, as is permitted under Jersey law. HMRC assessed the Distributions as being subject in income tax. AB argued that the Distributions were “dividends of a capital nature” within s.402(4) ITTOIA. As such, they should be subject only to capital gains tax, which is charged at a lower rate than income tax. On appeal, the First-tier Tribunal found that the Distributions were dividends, but not “of a capital nature”. S.402(4) ITTOIA did not apply, so AB’s appeal was dismissed. The Upper Tribunal upheld that decision, as did the Court of Appeal. AB now appeals to the Supreme Court of the United Kingdom.

Date of issue

7 July 2025

Case origin

PTA

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