In Gregory Finn, Averil Finn, Andrew Cornish and Robin Morris v HMRC [2015] TC 04347, a group of Enterprise Investment Scheme (EIS) investors lost their relief when their company was acquired by another company in a reverse takeover.

Their company, PhotonStar LED Limited, became the 51% subsidiary of another company, Enfis Limited within the relevant three year period following the issue of EIS shares. As a result, EIS relief was withdrawn as the requirements of s.185 ITA 2007 were not met.

Advance clearance had been applied for by Enfis' advisers for itself (it was also an EIS company) but it appears that no one had considered doing the same for PhotonStar.  

If you are doing a double-take on this case, there has been a long-running and multi-hearing battle by these investors to claim relief, see also EIS and takeovers: The devil is in the detail, whereby the investors sought to claim relief on the basis that since there was a reverse takeover and share for share exchange their resultant shares in Enfis should qualify for relief.

Links

EIS: Enterprise Investment Scheme (Subscriber guide)

External Link 

Gregory Finn, Averil Finn, Andrew Cornish and Robin Morris v HMRC [2015] TC 04347

 

 

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