H Osmond and another v HMRC

In H Osmond and another v HMRC [2024] UKFTT 378 (TC) (8 May) the First-tier Tribunal (FTT) dismissed the taxpayers’ appeals concerning share buybacks that were intended to crystallise CGT relief under the Enterprise Investment Scheme (EIS) deciding that in law they had a main purpose of obtaining an income tax advantage under the transactions in securities (TIS) anti-avoidance provisions. 

The taxpayers were UK resident individuals who were serial entrepreneurs. They subscribed for EIS shares in a company called Xercise Ltd. It originally operated an unprofitable sports club business which was sold. However the taxpayers retained their shareholdings in the company and used it as a holding company to invest in another business. That business was later sold and the taxpayers interposed a new holding company (Xercise2 Ltd) to which the EIS status was intended to pass and Xercise Ltd was liquidated. 

In March 2015 the...