A taxpayer’s claim for share loss relief was unsuccessful as the shares were not ‘ordinary shares’ within the meaning of the relevant legislation.
The individual appellants were allotted ordinary shares in a trading company in November 2006. The company’s equity was split equally between its shareholders. In June 2007, each shareholder was allotted further shares, which were described in the company’s accounts as ‘cumulative redeemable preference shares of £1 each’.
Following financial problems exacerbated by difficult trading conditions, the company subsequently became insolvent. A liquidator was appointed in January 2011, and the company was struck off in June 2012.
The appellants’ tax returns for 2010/11 included claims for share loss relief (under ITA 2007, s 131). Following enquiries into the appellants’ returns, HM Revenue
