Archive for January, 2014

In a case which highlighted the vital distinction for tax purposes between shares that are acquired by subscription on issue, and those that are subsequently purchased, a businessman has convinced a tribunal that he is entitled to £46,000 in tax relief in respect of a shareholding that had become of negligible value. The businessman and three colleagues had agreed to subscribe for £225,000 worth of new shares in the company for which they worked in order to alleviate its cash-flow difficulties. However, he was going through a divorce at the time; his assets had been frozen and he was unable to pay for the shares immediately. One of the businessman’s colleagues agreed to subscribe for 18 shares in the company on his behalf. Those shares were transferred to the businessman a few months later on his payment of £46,000 to his ... Read more