Weekly case highlights ― 1 February 2021

Produced by Tolley
Weekly case highlights ― 1 February 2021

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Weekly case highlights ― 1 February 2021
  • Income tax
  • Foojit Ltd v HMRC
  • VAT
  • HMRC v News Corp UK & Ireland Ltd
  • HMRC v Anna Cook

These are our brief notes and thoughts on cases published in the last week or so which caught our eye and are likely to be of particular interest to tax practitioners. Full case reports and commentary on most of these cases will be included within our normal reference sources in the coming weeks.

Income tax

Foojit Ltd v HMRC

Investors can obtain valuable tax reliefs under the enterprise investment scheme (EIS) if they make investments in qualifying companies. The rules defining qualification are notoriously complex. They impose a whole series of ‘red line’ tests. There is no space for a commercial or purposive interpretation: either a condition is met or it is not. This case illustrates that point well. The way that the share rights here were drafted fell foul of the rule which says that preference shares do not qualify if the date of a dividend or the amount payable depends to any extent on the decision of the company or any person. In other words, both the amount and the payment must be automatic and not subject to any sort of approval mechani

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