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N McLocklin (TC3182)
The taxpayer held eighteen shares in a company.
He did not have sufficient funds to pay for share at the time of their issue in November 2005 so a fellow shareholder W subscribed to them and sold them later to the taxpayer for £46 000.
They became worthless in 2008/09 and the taxpayer applied for share loss relief under ITA 2007 s 131.
HMRC refused the claim on the ground he had bought the shares from W rather than subscribing for them himself.
The First-tier Tribunal noted the Revenue “acknowledge that shares subscribed by a nominee satisfy the requirements of the s 135(2) and we think that this must extend to a case in which money is advanced to an individual to permit subscription but the shares are issued to another as security for the advance” [sic].
The judge concluded that W should be...
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