The taxpayer claimed tax relief in his self-assessment return for 2007/08 on two gifts of shares in a listed company made to two charities. The relief claimed (under ITA 2007, s 431) of £237,500 was based on a market value of £1 per gifted share on 4 April 2008. HMRC amended the taxpayer’s return, on the basis that the market value was only 30 pence per gifted share. The taxpayer appealed.
The taxpayer’s investment in the company (C) was made one month prior to the gift, amounting to £95,000. Subsequently, on 18 March 2008, C purchased shares in a trading company. On 4 April 2008, C became listed on a stock exchange. On the same day, the taxpayer made a gift of shares in C to the charities. He retained some shares for himself.
HMRC objected to the arrangement, claiming that the taxpayer’s prime motive was to obtain tax relief of £237,500 for a share investment of £95,000. However,
