Originally posted by woody1
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Prior to signing up with Procorre at the start of 2017 I ran a standard Ltd company paying myself in salary and dividends. I received a few payments in early 2017 into my Personal account via the ODCA before stopping them, as I was having some cashflow issues at the time, so I put the partnership on hold. Procorre then contacted me and started the discussions around the Acquisition and in the meantime I resumed receiving funds via the ODCA from Sept and up until Dec 1st 2017.
By Dec-17 I had signed the paperwork, share transfer documents etc and completed the acquisition. At that time, I enquired with Procorre what tax needed to be paid on the £14k funds received via the ODCA in 2017 and they said "it had been reconciled by themselves and I did not have to declare it". Why my accountant didn't raise a red flag to that, I have no idea.
Over the next few years, up until I terminated my partnership with Procorre in Apr 2021, I had received circa £194k in "earn out" payments into my personal account. I had always assumed these were completely legitimate and I had paid CGT on in April 2019 on the £220k valuation in anticipation of these earn-outs being received.
Up to Apr 2019 I had received around £78k in earn out payments
By Apr 2021 I had received another £114k in earn out payments
I guess it is HMRCs claim, that the acquisition is bogus, despite the paperwork of share transfer etc. If HMRC are saying the entire acquisition was not legitimate, then I assume these funds will have to be treated as income (unless I go to tribunal to argue), but I don't understand why I would have to pay tax on the full valuation for the year ending April 2019 and not in the actual years they payments were received i.e. 2019 - 21? I get it for the years 2017 - 19, but not after 2019. That is very confusing to me.
Graham Webber had written another post a week ago that relates to this. I'm not sure if it is good news or not though - https://www.linkedin.com/feed/update...7937045532674/
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