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The taxpayer was chairman of CEG a holding company in which he held ordinary and preference shares. On 12 March 2012 he exchanged all his shares for new ones in company 2. A day later he exchanged those for shares in CEH Ltd and of which he became a director in October 2012.
If the preference shares were ordinary share capital as defined in ITA 2007 s 989 the taxpayer held 5.777% of CEH Ltd. If they were not he held only 3.5%.
In December 2013 the taxpayer sold his shareholding for cash and ceased to be a director of CEH Ltd and chairman of CEH. He claimed entrepreneurs’ relief on the disposal in his 2013-14 tax return. HMRC refused the claim on the basis CEH Ltd was not his ‘personal company’ (TCGA 1992 s 169S(3)).
Allowing the taxpayer’s appeal the First-tier Tribunal ...
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