Foojit Ltd v Revenue & Customs (INCOME TAX - ENTERPRISE INVESTMENT SCHEME - tax relief) [2019] UKFTT 694 (TC) (13 November 2019)

Foojit Ltd v Revenue & Customs (INCOME TAX - ENTERPRISE INVESTMENT SCHEME - tax relief) [2019] UKFTT 694 (TC) (13 November 2019)

The B Shares carried a preferential right to dividends, and the date on which such dividends became payable depended on a decision of the company or its agents, as the Articles did not specify a fixed date. This falls within the exclusion in s173(2A) ITA 2007, so the shares do not qualify for EIS relief.

Citation
[2019] UKFTT 694
Parties
Appellant: Foojit Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
13 November 2019
Procedural Posture
Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal dismissed
Legal Topics
Enterprise Investment Scheme, Income Tax Act 2007 S173, Preferential Share Rights, Dividend Rights, Statutory Construction
Tax Law Company Law Enterprise Investment Scheme Income Tax Act 2007 S173 Preferential Share Rights Dividend Rights Statutory Construction

Case Brief

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Parties

Foojit Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether B Shares issued by Foojit Limited carried a preferential right to dividends within the meaning of s173(2A) ITA 2007, thereby excluding them from EIS relief.
  2. 2 Whether the date on which dividends become payable depends on a decision of the company, shareholder, or any other person under the Articles of Association.

Ratio Decidendi

The B Shares carried a preferential right to dividends, and the date on which such dividends became payable depended on a decision of the company or its agents, as the Articles did not specify a fixed date. This falls within the exclusion in s173(2A) ITA 2007, so the shares do not qualify for EIS relief.

Court Disposition

Appeal dismissed