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HMRC v RJ Taylor

In HMRC v RJ Taylor (and related appeal) (No 2) (Upper Tribunal – 23 November) two individuals claimed EIS relief in respect of shares in a company (W). HMRC rejected their claims on the grounds that they were connected with W since the effect of certain loans they had made was that they each held more than 30% of W’s capital (aggregating loan and share capital for the purposes of the legislation). They appealed contending that they should not be treated as ‘connected’ within the terms of the legislation since they did not hold 30% of the company’s issued share capital. The Upper Tribunal rejected this contention and upheld the assessments. Roth J held that the 30% threshold applied to ‘a single composite category’ which included loan capital as well as share capital.

Why it matters: Under the EIS rules in ITA 2007 s 170...

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