In J Cooke v HMRC [2024] UKFTT 272 (TC) (3 April 2024) the FTT held that the taxpayer was entitled to entrepreneurs’ relief (now business asset disposal relief) on the disposal of his shareholding in a company even though he held less than 5% of the ordinary share capital.
The taxpayer (C) had acquired his shares under an agreement to buy 5% of the company from two of the existing shareholders. C’s evidence was that he was focused on the 5% because he knew that he needed at least 5% to qualify for relief on disposal. He requested that the documents governing the acquisition should include an anti-dilution clause so that his shareholding would not fall below 5%. Due to a rounding error in a spreadsheet used to calculate the number of shares he in fact acquired 245 802 shares one short of the number required for a 5%...
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