Case Note: Non-Compete Fees Paid on the Sale of Shares Not Taxable

This case note sets out the ruling by the Authority for Advance Rulings in HM Publishers Holdings Limited that the receipt by a shareholder of non-compete fees paid on the sale of shares of a company to another company constitutes business income. However, in the absence of a permanent establishment in India, the foreign shareholder was not chargeable to tax in India under the India-United Kingdom Income Tax Treaty (1993).