Jonathan Cooke v The Commissioners for HMRC

Jonathan Cooke v The Commissioners for HMRC

The Tribunal found clear evidence that all parties intended the Appellant to acquire at least 5% of the company’s ordinary share capital, and that the failure to do so was a mistake in the documentation. The High Court would have granted rectification, as there was a common intention, outward expression of accord, and the mistake was not merely fiscal in effect. Therefore, the conditions for entrepreneurs’ relief were met and the appeal was allowed.

Parties
Appellant: Jonathan Cooke; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeal allowed
Legal Topics
Entrepreneurs’ Relief, Rectification of Documents, Capital Gains Tax
Tax Law Equity Entrepreneurs’ Relief Rectification of Documents Capital Gains Tax

Case Brief

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Parties

Jonathan Cooke

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether the Appellant is entitled to entrepreneurs’ relief despite holding less than 5% of the ordinary share capital due to a mistake
  2. 2 Whether the Tribunal can proceed as if rectification had been ordered by the High Court

Ratio Decidendi

The Tribunal found clear evidence that all parties intended the Appellant to acquire at least 5% of the company’s ordinary share capital, and that the failure to do so was a mistake in the documentation. The High Court would have granted rectification, as there was a common intention, outward expression of accord, and the mistake was not merely fiscal in effect. Therefore, the conditions for entrepreneurs’ relief were met and the appeal was allowed.

Court Disposition

Appeal allowed

Orders

  • The Appellant is entitled to entrepreneurs’ relief as if rectification had been granted.