In Neil McLocklin v HMRC (TC03182 – 6 January 2014) the issue was whether Mr McLocklin had acquired shares by subscription or by purchase from another shareholder.
Under TCGA 1992 s 131 share loss relief (on the sale of shares) could only be available if the shares had been acquired by subscription (as the shares did not qualify for EIS relief). At the time of the share issue Mr McLocklin had not had the funds to participate in the subscription and Mr Winter (a fellow shareholder) had subscribed for the shares on the basis of an agreement that he would later sell them to Mr McLocklin.
The tribunal noted that the agreement was akin to a loan under which shares were issued to Mr Winter as security pending reimbursement of the subscription monies. The tribunal pointed out that Parliament has decided that relief should not be...
