HMRC v Euromoney Institutional Investor plc

In HMRC v Euromoney Institutional Investor plc [2022] UKUT 205 (TCC) (29 July 2022) the Upper Tribunal (UT) upheld the decision of the First-tier Tribunal (FTT) that share for share treatment was available despite the presence of a tax avoidance purpose.

The taxpayer negotiated with a private equity backed company for the disposal of a shareholding it held. The original commercial agreement was that the consideration for the disposal would be ordinary shares in the acquiring company and an amount of cash; however at the suggestion of the taxpayer’s tax director the commercial agreement was revised and preference shares were substituted for the cash element of the consideration.

The substitution of the preference shares was intended to enable the taxpayer to benefit from tax neutral treatment by virtue of TCGA 1992 s 135 and then after the requisite holding period benefit from the substantial shareholding exemption (SSE) on the redemption of...

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