Cook (Inspector of Taxes) v Billings and Related Appeals
| Jurisdiction | England & Wales |
| Judgment Date | 24 May 1999 |
| Date | 24 May 1999 |
| Court | Chancery Division |
Chancery Division
Before Mr Justice Laddie
Income tax - business expansion scheme - partners qualify for tax relief
Taxpayers in partnership who together owned the shares of a company that was a qualifying company for the purposes of the business expansion scheme were not disqualified under the provisions of section 291(1) of the Income and Corporation Taxes Act 1988 from the relief given under the BES legislation.
Mr Justice Laddie so held in a reserved judgment in the Chancery Division dismissing appeals by way of case stated by the Crown from determinations by Gravesend general commissioners that Mr Andrew Billings, Mr Ronald Billings, Mr Stephen Billings, Mr Clive Billings, Mrs Jill Cawood, Mrs Veronica Clifford and Sheila Jefferies qualified for the BES relief in respect of their application for shares in 1993 in Fearnhead Homes Ltd.
Section 137 of, and Schedule 15 to the Finance Act 1994 made amendments to Chapter III of Part VII of the 1988 Act by the introduction of the enterprise investment scheme.
Mr Michael Furness for the Crown; Mr Christopher Sokol for the taxpayers.
MR JUSTICE LADDIE said that in 1993 the taxpayers applied for shares in Fernhead Homes Ltd. They held equal numbers of shares, so that each held just under 15 per cent of the issued share capital.
Their claim for tax relief was refused on the basis that each of them was an associate of the others, within the meaning of that word in the legislation and that each of them when taken together with his associates,
had a relevant interest in more than 30 per cent of the share capital of the company .
The only issue was whether the taxpayers were qualifying individuals, it being accepted that in all other respects they met the provisions of the BES legislation.
By section 291(1)(c) of the Act "…an individual qualifies for the relief if he … is not at any time in the relevant period connected with the company…"
By section 291(4) "… an individual is connected with the company if he directly or indirectly possesses or is entitled to acquire more than 30 per cent of - (a) the issued ordinary share capital of the company…"
The Crown argued that each of the taxpayers was, in a relevant sense, connected with Fernhead Homes Ltd.
There was no dispute that the taxpayers were all associates of each other within the meaning of the provisions.
The Crown's case was that the words in the second part of...
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Barry Clarke Cook (HMIT) v Andrew John Billings & Others
...Act). He dismissed the Crown's appeals, but granted unconditional permission to appeal to this court. His Judgment is now reported in [1999] STC 661. 2 The dispute concerns the eligibility of the taxpayers for relief from income tax in respect of their investment in a Business Expansion Sch......
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Cook (Inspector of Taxes) v Billings and Related Appeals
...so held in reserved judgments (Lord Justice Ward dissenting) allowing an appeal by the Crown from the judgment of Mr Justice Laddie (The Times June 8, 1999; (1999) STC 661) in which he had upheld a determination by Gravesend general commissioners that the taxpayers: Mr Andrew Billings, Mr R......