This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Share buybacks did not necessarily constitute a main purpose of obtaining an income tax advantage for transactions in securities purposes

By Mark McLaughlin, August 2025

The First-tier Tribunal made an error of law in concluding that the appellants’ purpose of undertaking share buybacks to crystallise enterprise investment scheme disposal relief necessarily constituted a main purpose of obtaining an income tax advantage. 

Summary 

The First-tier Tribunal (FTT) made an error of law in concluding that the appellants’ purpose of undertaking share buybacks to crystallise enterprise investment scheme (EIS) disposal relief necessarily constituted a main purpose of obtaining an income tax advantage. 

Background 

The appellants, UK-resident serial entrepreneurs, made successive investments with a view to realising capital gains. The appellants each invested in a company (X) as minority shareholders through three successive share subscriptions in accordance with the EIS between February 1996 and May 1998.  

In March 2015,

Subscribe to the McLaughlin’s Tax Case Library to get instant access
to the Tax Case Library.
14 day free trial , 90 day money back guarantee
Subscribe

Related or similar articles

Compensation received due to mis-selling of interest rate hedging products was taxable income
By Mark McLaughlin, November 2024
Personal expenses paid through a director’s loan account represented an extraction of value
By Mark McLaughlin, September 2024
Agent’s letters were insufficient to notify HMRC of taxpayer’s chargeability to tax on rental income
By Mark McLaughlin, June 2024
Gambling vs non-gambling
By Malcolm Finney, January 2023
Discovery assessment conditions were not satisfied
By Mark McLaughlin, September 2022