In HMRC v M and E McQuillan [2017] UKUT 344 (6 September 2017) the UT found that redeemable shares were part of the ordinary share capital of a company so that it was not the personal company of its two directors (TCGA 1992 s 169I(6).
Mr and Mrs McQuillan had set up a company to run a sandwich shop business. They each held shares in the company together with two family members who also jointly made a £30 000 loan to the company. When the McQuillans approached a business development agency for a grant they were asked to convert the loan into redeemable shares. As a result the issued share capital of the company comprised 100 voting shares (of which the McQuillans held 66) and 30 000 non-voting redeemable shares held by the two family members.
Later on Mr and Mrs McQuillan claimed entrepreneurs’...
