Peter Vaines delves into some most interesting tax issues
- Entrepreneurs relief.
- New DOTAS hallmark.
- Restricted securities
- Careless conduct.
The recent case of Mr and Mrs McQuillan v HMRC TC 5074 gives rise to a most interesting issue (actually, if anybody else finds this interesting, they should buy an anorak and come on holiday with me).
The taxpayers each held 33 ordinary shares of £1 each in a trading company. Other shareholders had 30,000 non-voting shares which had no rights to dividends.
The question was whether these 30,000 non-voting shares were “ordinary shares” for the purposes of entrepreneurs’ relief because if they were, the taxpayers obviously did not have the necessary five per cent of the ordinary share capital enabling them to qualify for the relief.
Section 989 of the Income Tax Act 2007 provides the definition of ordinary share capital as follows: “All the company’s issued share capital (however described) other than capital the holders of which have a right to a dividend at a fixed rate
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