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  In Susan Corbett v HMRC [2014] TC 03435, a wife, who had apparently resigned from her husband’s business was still treated as an employee for the purposes of Capital Gains Tax (CGT) relief.

For Entrepreneurs' Relief (ER) to apply to a disposal of shares:

HMRC refused ER on the ground that Mrs Corbett was not employed during the year preceding the transfer of her husband’s company because she received no consideration for her services.

The First Tier Tax tribunual (FTT) held ER was available to her as an employee because:

Comment

The facts of this case are unusual and there are potential PAYE ramifications for the company, not also forgetting the National Minimum Wage regulations. There may be occasions where shareholders such as spouses are working in what HMRC would describe as "disguised employment" and might contemplate a claim that they are an employee or de facto director. Alternatively spouses may be company secretaries and part-time workers.

External links

Susan Corbett v HMRC TC 03435