Segesta Ltd v Revenue & Customs [2010] UKFTT 235 (TC) (21 May 2010)

Segesta Ltd v Revenue & Customs [2010] UKFTT 235 (TC) (21 May 2010)

The Tribunal found that the sums paid to Mr Oyston were repayments of debt and not qualifying payments; there was insufficient evidence that instructions were given to invest only by share subscription, and the agent's actions did not alter the legal characterisation. Therefore, the shares issued were not 'eligible shares' and reinvestment relief was not available.

Citation
[2010] UKFTT 235
Parties
Appellant: Segesta Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
21 May 2010
Procedural Posture
Tax Appeal / Final Judgment
Outcome
Appeal dismissed
Legal Topics
Enterprise Investment Scheme, Reinvestment Relief, Eligible Shares, Repayment of Debt, Fraud or Malfeasance, Authority of Agent, Mistake
Taxation Capital Gains Tax Enterprise Investment Scheme Reinvestment Relief Eligible Shares Repayment of Debt Fraud or Malfeasance Authority of Agent +1 more

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Parties

Segesta Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / Final Judgment

Legal Issues

  1. 1 Whether the amount received by Mr Oyston was repayment of debt or a payment within Schedule 5B, paragraph 13(2) of TCGA 1992
  2. 2 Whether shares issued were 'eligible shares' for EIS purposes
  3. 3 Effect of agent's fraud or malfeasance and authority

Ratio Decidendi

The Tribunal found that the sums paid to Mr Oyston were repayments of debt and not qualifying payments; there was insufficient evidence that instructions were given to invest only by share subscription, and the agent's actions did not alter the legal characterisation. Therefore, the shares issued were not 'eligible shares' and reinvestment relief was not available.

Court Disposition

Appeal dismissed

Orders

  • Authority to issue EIS certificates to Mr Oyston refused
  • Shares subscribed by Mr Oyston in December 1999 not treated as eligible shares for reinvestment relief