No entrepreneurs’ relief on trust’s share disposal

The Peter Buckley Settlement was created in March 1999. Peter Buckley was the principal beneficiary and was also a trustee of the settlement.

In its 2015-16 self-assessment tax return the settlement claimed entrepreneurs' relief (now business asset disposal relief) on the sale of a single share in Peter Buckley Clitheroe Ltd. Mr Buckley was a director of the company from its incorporation in 2009 to November 2015.

The company’s annual return showed that in 2009 one ordinary voting share had been issued to Mr Buckley and that he transferred the share to the Peter Buckley Settlement in September 2012.

After an enquiry into the trust’s return HMRC refused the claim for entrepreneurs’ relief. This was on the basis that one of the conditions for the trustees to claim relief on a share disposal was that the beneficiary must own 5% of the shares in their own right....