Shares not eligible for SEIS relief

The taxpayer (CAIL) was incorporated to exploit intellectual property to a pre-school animation programme and related spin-offs. In 2017 it asked HMRC for advance assurance that it would qualify for the seed enterprise investment scheme (SEIS). HMRC confirmed it would give authorisation.

The company submitted compliance statements on the issue of its B shares and HMRC issued compliance certificates for the shares issued before 15 March 2018 but refused to authorise later share issues.

The First-tier Tribunal dismissed the taxpayer’s appeal and the matter progressed to the Upper Tribunal.

The taxpayer said the First-tier Tribunal had erred in law in finding that the arrangements for issuing the shares were ‘disqualifying arrangements’ because condition A in ITA 2007 s 257CF(3) was met.

The Upper Tribunal agreed with the First-tier Tribunal that there were arrangements in place involving the incorporation of the taxpayer the issue of shares the acquisition of the...