Bang to rights

On 27 December 2002 just before she died Mrs DC was allotted one million ordinary shares in the company. She and her husband had held shares in the company for at least two years before that and also had loan accounts with it. Before Mr DC's death in April 2002 the company had made a rights issue with the husband's loan account being used to pay for the shares. This qualified for business property relief and he gifted some shares to one of his daughters.

As Mrs DC's health deteriorated quickly after her husband's death the company directors discussed converting her loan account of £300 000 into a rights issue with the intention of business property relief. Eventually on 23 December 2002 300 000 shares were allotted to her as her entitlement to the rights issue. The one million shares were allotted...