Gregory Finn and others v HMRC

In Gregory Finn and others v HMRC [2015] UKFTT 144 (13 April 2015) the FTT confirmed that a company which had undergone a ‘reverse takeover’ ceased to qualify for EIS.

PhotonStar LED had 12 to 15 enterprise investment scheme (EIS) investors. It sought an AIM listing and started negotiations with Enfis for a ‘reverse takeover’. Both companies were in the LED lighting business and Enfis’ shares also qualified for EIS. Enfis acquired PhotonStar by way of a share for share exchange HMRC having confirmed that Enfis would continue to be ‘a qualifying company’ for the purpose of EIS.

Following the reverse takeover HMRC wrote to PhotonStar informing it that it no longer qualified for EIS stating that EIS is withdrawn where the company becomes the 51% subsidiary of another company (ITA 2007 s 185) or where shares in the company are sold within three years...