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In CHF PIP! Plc v HMRC [2021] TC08305, the First Tier Tribunal (FTT) found that a company's issue of shares to investors did not qualify for EIS relief. Despite the company trading, that trade was not undertaken on a commercial basis with a view to profit.

The FTT found that:

In considering whether that trade was undertaken on a commercial basis with a view to the realisation of profits, the FTT viewed the profit test is purely subjective and the business in question needs to be considered.

Finding that “the figures are a pious hope rather than evidence of a genuine intention to make a profit”, the FTT dismissed the appeal.

While that conclusion was sufficient to dismiss the appeal, the FTT went on to consider whether:

Useful guides on this topic

EIS: Enterprise Investment Scheme: At a glance
This is a freeview 'At a glance' guide to the Enterprise Investment Scheme (EIS).

EIS: Enterprise Investment Scheme (Subscriber guide)
When can EIS relief be claimed? What are the conditions for EIS relief? What are the benefits of EIS relief?

How to appeal an HMRC decision
Disagree with a HMRC decision? How to appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External links

CHF PIP! PLC v HMRC [2021] TC08305


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