Share buyback consideration received by serial entrepreneurs on which EIS disposal relief was claimed in their tax returns was within the transactions in securities regime and was therefore subject to income tax.   

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 enterprise investment scheme (EIS) between February 1996 and May 1998.  

In March 2015, the appellants entered into share buybacks, for the main purpose of enabling the appellants to crystallise or bank EIS disposal relief. The appellants and their advisers took the view that this consideration represented a return of capital and was thus subject to the capital gains tax (CGT) regime. However, the appellants’ tax returns for 2014/15 were filed on the basis that no