Trustees of the Peter Buckley Settlement v The Commissioners for HMRC
Decision date: 4 January 2024
Neutral citation: [2024] UKFTT 29 (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 appeal concerned whether Entrepreneurs' Relief (ER) could be claimed on sale of the single ordinary share in Peter Buckley Clitheroe Ltd when that share was registered in the trustees' names for an interest in possession trust whose life tenant/trustee was Mr Buckley. The Tribunal held the statutory requirement that the qualifying individual hold at least 5% of the ordinary share capital and related voting rights in their personal capacity was not met because the registered share belonged to the trust, not personally to Mr Buckley. HMRC was correct to disallow ER and the trustees' appeal was dismissed; the additional CGT remained payable.
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: high
For the purposes of ER under the provisions at issue in this case, the qualifying individual must hold the requisite percentage of ordinary share capital and voting rights in their personal capacity; legal title vested in trustees for an interest in possession trust does not satisfy the personal holding requirement.
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 Tribunal observed that Parliament's intent supports a literal application of the personal holding requirement and rejected purposive arguments to convert trustee-held shares into personal ownership; it also noted that a trust structure merely resembling a bare trust does not automatically convert trustee legal ownership into personal ownership for tax-relief purposes.