A taxpayer’s claim for share loss relief was successful, as he subscribed for the shares, and the shares were not valueless when he acquired them.
The appellant lent funds to a company, as and when required. The monies were paid in the first instance by the appellant to his son (D), who was a director shareholder of the company, and D then paid them onto the company.
When the loan reached over £100,000 on 1 March 2011, it was converted into 99,900 shares of £1 each. Shortly after the issue of the shares to the appellant, a potential new investor (H) withdrew from a deal to invest in the company. The company was running out of working capital. It subsequently ceased trading on 3 May 2011.
The appellant claimed share loss relief (under ITA 2007, s 131) in his tax return for 2011/12. However, following an enquiry into the return, HM Revenue and Customs (HMRC) disallowed the loss. The
