Effect of loan repayment

Segesta Ltd was incorporated in 1985. Between May 1994 and May 2000 it held at least 95% of the shares in Blackpool Football Club a subsidiary of the appellant company.

Mr Oyston was the controlling shareholder and director of those companies and over the years made substantial loans to Blackpool FC.

In 1999 Mr Oyston subscribed for shares in the appellant company which then applied to HMRC to issue a certificate to Mr Oyston to allow him to apply for reinvestment relief under the enterprise investment scheme in respect of those shares.

At the same time Blackpool FC repaid the loans to Mr Oyston. HMRC refused to issue the certificate. The taxpayer company appealed.

The First-tier Tribunal reviewed the evidence in detail. It was complicated by the fact that Mr Oyston was in prison from 1996 to 1999 during...