Legend of Golden Temple Limited & Ors v The Commissioners for HMRC
Decision date: 23 November 2023
Neutral citation: [2023] UKFTT 988 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This Tribunal dismissed ten joined appeals by companies (all with the same sole director) against HMRC’s refusal to issue SEIS compliance certificates, finding that the companies had been artificially fragmented, failed the risk-to-capital and trading/creation-of-intangible-assets conditions, and that some later share issues were caught by disqualifying arrangements; one company’s April 2019 share issue also failed because an investor did not fully pay. The result is dismissal of all appeals, with permission to apply for appeal within 56 days.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The Tribunal applied that where separate companies are established but funding, payments and control are intermingled and substantial work is subcontracted to connected parties, that structure can be treated as artificial fragmentation relevant to the SEIS risk-to-capital inquiry; appellants bear the evidential onus to prove on the balance of probabilities that they conducted qualifying trade commercially throughout Period B and that they created relevant intangible assets; and payments for shares must be received in cash by the company so that oral commitments or funds retained in an investor’s account do not satisfy the requirement that shares be fully paid.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The notes record the Tribunal’s observations that HMRC’s preliminary or typographical favourable comments (such as advance assurances) do not substitute for statutory compliance, and that close personal relationships or contractors’ goodwill (e.g. accepting delayed or reduced payment) may affect assessments of commerciality and independence but do not, by themselves, turn non‑commercial activity into qualifying commercial trade.