John Boulting v The Commissioners for HMRC

John Boulting v The Commissioners for HMRC

The Tribunal found that the company's purpose in purchasing the shares was to secure Mr Boulting’s exit from the business in order to benefit the trade by resolving management disputes and enabling investments. The purchase was not for the purpose of remunerating Mr Boulting for historic investment or extracting cash reserves. Condition A was satisfied.

Parties
Appellant: John Boulting; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
28 October 2025
Procedural Posture
Tax Appeal / Final Judgment
Outcome
Appeal allowed
Legal Topics
Capital Gains Tax, Company Purchase of Own Shares, Entrepreneurs Relief, Distribution Vs Capital Gain, Trade Benefit Test
Tax Law Company Law Capital Gains Tax Company Purchase of Own Shares Entrepreneurs Relief Distribution Vs Capital Gain Trade Benefit Test

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Parties

John Boulting

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / Final Judgment

Legal Issues

  1. 1 Whether the purchase of own shares was wholly or mainly for the purpose of benefiting a relevant trade under s1033 CTA 2020
  2. 2 Whether the payment should be taxed as a distribution or capital gain

Ratio Decidendi

The Tribunal found that the company's purpose in purchasing the shares was to secure Mr Boulting’s exit from the business in order to benefit the trade by resolving management disputes and enabling investments. The purchase was not for the purpose of remunerating Mr Boulting for historic investment or extracting cash reserves. Condition A was satisfied.

Court Disposition

Appeal allowed

Orders

  • Closure notice amended; sale of shares to company to be taxed as capital gain, not as distribution.
  • Entrepreneurs Relief applies to the transaction.