Summary
Deferred shares were ‘ordinary shares’, which had to be taken into account such that the taxpayer held less than the required 5% of the company’s ordinary share capital for entrepreneurs’ relief purposes (i.e. the ‘personal company’ definition in TCGA 1992, s 169S(3)).
Background
The appellant owned a number of ‘A’, ‘B’ and preference shares in a company, together with loan notes. He disposed of loan notes during the tax years 2011/12 and 2012/13, and claimed capital gains tax entrepreneurs’ relief (ER) in respect of the disposals.
The company’s share capital included deferred shares, which had no voting rights and no right to dividends; their sole value was in the right to be redeemed at par on a capital realisation after at least £1 million had been distributed in respect of each
