The disposal of guarantee rights did not equate to the disposal of shares in a company for entrepreneurs’ relief purposes.  

The appellant was a director of a company (‘MAH’), which was limited both by share capital and guarantee rights, as it had been incorporated before changes in company law requiring companies to have one or the other but not both. MAH’s articles of association provided for both shareholder members and investor members.  

Only shareholders were required to pay or contribute to the capital of the company; investor members were instead required to pay for ‘distribution rights’ costing £100 each. In June 2009, the appellant became an investor member as he acquired four ‘distribution rights’ for £100 each. 

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