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,