Clark v Mayo

This case examines whether associated disposal of property four-weeks before the cessation of a business was eligible for retirement relief

Ch D 1994, 66 TC 728; [1994] STC 570     

The taxpayer owned shares in a trading company and also personally owned a share in the premises which the company used in its trade.

The trading premises were sold on 31 January 1989. On 28 February 1989, the company ceased trading and, one year later, on 28 February 1990, the taxpayer transferred his holding in the company to his children.

The taxpayer claimed retirement relief on the disposal of the shares as a 'material disposal' and the earlier sale of the property as an 'associated disposal'.

The Inland Revenue denied the claim on the grounds that the company had ceased to occupy the property four weeks before it ceased trading.

It was held that the disposal of the shares constituted a 'material disposal' for retirement relief purposes and that the earlier disposal of the property qualified as an 'associated disposal' on the grounds that, although the company had ceased to occupy the property four weeks earlier, that this was sufficiently proximate to be regarded as 'immediately beforeā€¦ cessation of business'.

Retirement relief applied on both disposals accordingly.