The appellant’s disposal of shares did not qualify for entrepreneurs’ relief as the company had been carrying on activities which were, to a substantial extent, not trading activities.

Summary

The appellant’s disposal of shares did not qualify for entrepreneurs’ relief as the company had been carrying on activities which were, to a substantial extent, not trading activities.

Background

The appellant (AA) owned some 57% of the shares in a company (AML) that carried on the principal activity of an industrial and marine engineering business. The remaining shares were owned by his wife (FA). 

In 2010, AA and FA were seeking to acquire Hull City Football Club. The acquisition was effected through a new holding company (Allamhouse). The shares of AA and FA in AML were transferred to Allamhouse in consideration for an issue of shares by Allamhouse to AA and FA in the