Entitlement to entrepreneurs’ relief

In 2004 the taxpayer set up B Ltd. In 2007 B was created as a corporate vehicle through which B Ltd would be listed on the alternative investment market. The taxpayer was a director and largest single shareholder of both companies but ceased his directorship of B in 2013 having become non-executive chairman in May 2009. He also acted as a consultant. In November 2010 he became executive chairman.

On 12 September 2014 and 16 September 2015 he disposed of shares in B each of which gave rise to a substantial gain. He claimed entrepreneurs’ relief in respect of each disposal but HMRC refused his claims on the basis that he was not an officer or employee of B throughout the period of one year ending with each disposal.

The taxpayer appealed.

The First-tier Tribunal considered first whether the taxpayer was employed by B on 15...