Copy of Peter’s blog on Accounting Web re HMRC’s potential challenge to ER on ‘multiple completion’ purchase of own shares transactions

Tax expert Peter Rayney replies to concerns that HMRC may deny entrepreneurs’ relief to shareholders who sell their shares back to the company.

My article, New challenge to entrepreneurs’ relief, was born out of a lecture given by a leading tax barrister based on his experience of entrepreneurs’ relief (ER) claims connected with the purchase of own share (POS) transactions being challenged by HMRC.

The arguments over the validity of these claims haven’t yet reached a tax tribunal, and any revised HMRC guidance is unlikely to be published until after such a tribunal case has been heard.

HMRC’s potential argument is that multiple completion dates used under some POS transactions don’t allow ER to be claimed on the value paid in the second and subsequent tranches.

This is contrary to every learned tax article ever written on this point, as Peter Rayney explains below.

Clearance comfort

When a POS clearance is obtained under CTA 2010, s 1044, this simply confirms that the amount payable to the shareholder under the POS transaction is not treated as a distribution (and is, therefore, subject to capital gains tax). The clearance doesn’t provide any confirmation that ER is available. So the fact that a CTA 2010 s1044 clearance has been obtained is of no real comfort to the taxpayer or his advisers.
Legal points
HMRC’s potential argument goes against the currently accepted technical analysis on multiple completion POS transactions. I see that there is a legal point on the concept of whether there is an ‘acquisition’ in the context of a POS. Indeed, I would rely on this very point when it comes to claiming a capital loss on a POS (since there is no acquisition the ‘connected party’ loss rules should not apply).
Literal approach
What we have here is HMRC taking a very literal approach to the operation of TCGA 1992, s 28 in a way that was probably never even contemplated by the draftsman or indeed by Parliament. I strongly suspect that the reason why this point is being taken has something to do with the denial of 10% CGT entrepreneurs’ relief to some innocent taxpayer.
Established practice
We should be able to rely on a ruling on this issue given back in 1989. In a statement, the Inland Revenue (as it was then) indicated its agreement to a POS being made in instalments, as reported in the ICAEW technical release 745 issued in April 1989. Indeed, para 10 (b) of the release states:
‘‘They [the Inland Revenue] take the view that as the beneficial ownership of the shares is regarded as passed at the date of the contract, a disposal for capital gains tax purposes will have taken place by the vendor at that time notwithstanding payments at later dates.’’
As far as I am aware HMRC has not retracted its agreement of this statement, so there must be a reasonable ‘legitimate expectation’ argument to run in relation to multiple completion POS transactions that have already taken place.
No avoidance
In my view, multiple completion dates used as part of a POS transaction do not involve any form of tax avoidance. The arrangements simply enable the company to ‘defer’ part of the purchase consideration in a ‘Companies Act’ compliant manner. In fact, under conventional analysis, all the CGT is paid up-front on the basis of the contract date per TCGA 1992, s 28, – so where is the mischief in that!
Looking forward
If HMRC’s new argument was ever taken to a tax tribunal, I do hope that the tribunal would take a reasonable balanced – and purposive – view of what is going on here. In my view it is an apparent ‘u-turn’ in HMRC’s tax treatment of entirely legitimate POS transactions just to deny ER.
If HMRC succeed in rewriting the CGT analysis for multiple completions, I suspect that more of us will simply be advising companies to structure their ‘buy-out’ transactions in a way that will deliver the anticipated ER CGT 10% for the ‘exiting’ shareholders. In some cases, it may necessary to use a new company (‘Newco’) as the acquisition vehicle to buy-out the shares of the departing shareholder with the existing shareholders ‘swapping’ their shares under the share exchange rules in TCGA 1992, s 135. But what an unnecessary palaver!

Peter Rayney provides independent tax advice to owner-managed businesses, tax advisers, accountants and lawyers. He also chairs the ICAEW Tax Faculty technical committee and is a CIOT council member


West Ham Utd Player Awards 2015/16 Brochure

West Ham Utd Player Awards 2015/16 brochure

Best Individual Performance of the Season

PRTC sponsors of Best Individual Performance of the Season Award

Peter Rayney Presenting Michail Antonio with his award

Peter Rayney Presenting Michail Antonio with his award

We were proud to support the West Ham Utd Player Awards again this year, sponsoring the ‘Best Individual Performance of the Season’, which went to Michail Antonio for his great all round performance in the FA Premier League 1-0 win over Spurs (see above).

All our guests said they had a fantastic night at the club’s Player Awards, which was held at the lavish Hilton on Park Lane.  After a brilliant season, there was a vibrant and jubilant atmosphere in the room as we celebrated the team’s and individual player achievements.

The evening was hosted by Sky Sports F1 lead commentator and lifelong hammers fan, David Croft. The irrepressible auctioneer Jonny Gould put in an indefatigable performance playing bidders off against each other to extract the maximum cash for the benefit of the West Ham Academy.

It was great to chat to 1966 World Cup ‘hatrick’ hero Geoff Hurst and see him pick up his 2016 Lifetime Achievement Award

Geoff Hurst with his Lifetime Achievement Award

Geoff Hurst with his Lifetime Achievement Award

The PRTC guests

The PRTC guests

Dimitri ('We've Got') Payet cleaned up by taking five awards

Dimitri (‘We’ve Got’) Payet cleaned up by taking five awards and was named ‘Hammer of the year’

A word from 'happy' captain Mark

A word from ‘happy’ captain Mark

On a personal level, it was great to meet Slaven and many of the players and say ‘THANK YOU!’ for a great season – they all obliged with a selfie…here are a few of them!

...with the gaffer

…with the gaffer

...with Andy Carroll

…with Andy Carroll

.......with James Collins

…….with James Collins



Mark's Guard Of Honour

Mark’s Guard Of Honour

What a lovely way to spend Easter Monday to honour and pay respects to the West Ham captain Mark Noble. The Easter sunshine also came out to show homage.

Mark Noble joined the club as a 13 year old schoolboy and has now amassed some 350 first team appearances – no wonder he is affectionately known as ‘Mr West Ham’

It was great to see many formers Hammers players featuring in a West Ham United All-Stars squad lining up against the current West Ham United team (although Dimitri Payet was on international duty).

Paolo Di Canio, Teddy Sherringham, Carlton Cole, Craig Bellamy, Scott Parker, Stewart Downing, Dean Ashton, Trevor Sinclair, Julian Dicks and Ludek Miklosko showed they were still useful with the ball.

Memorable moments were

– Adrian dribbling all the way up the field to score a goal (with Michail Antonio dealing with those who were in Adrian’s path!)

– Dean Ashton’s overhead kick wonder goal

– Guard of honour for Mark Noble at the beginning and the end of the game

– Deserved standing ovation from the 35,000 Hammers crowd

Here are some photos from the memorable afternoon:

PRTC guests line-up outside the box!

PRTC guests line-up outside the box!

Mark Noble interview on Big Screen

Mark Noble interview on Big Screen

Mark Noble acknowledges the standing ovation

Mark Noble acknowledges the standing ovation


West Ham v Everton – Match ball sponsor (7 Nov 2015)

We were pleased to be able to be the Match Ball sponsor at the West Ham v Everton game at Upton Park. The biggest upset was James McCarthy’s ugly tackle on Dimitri Payet, which looked like a ‘sending off’ offence.  Payet was replaced by Enner Valencia who threatened on several occasions and then he was forced off by a tackle from Seamus Coleman.

The game ended in a 1-1 draw, with Victor Moses being awarded Man Of The Match.

Match Of The Match Presentation with Victor Moses

Match Of The Match Presentation with Victor Moses

PRTC advert on big screen

PRTC advert on big screen

Neil Warren with signed match-ball

Neil Warren with signed match-ball

Nick and Fran Rayney with signed match-ball

Nick and Fran Rayney with signed ball

Dave Cartwright Memorial Concert – 4 November 2015

This year, we suddenly lost Dave Cartwright, who was probably one of our most under-rated folk songwriters and performers. And it was most fitting that his admirers and fans organised an evening to celebrate his 50 years in music and performing at The Conquest Theatre in Bromyard (Herefordshire).

John Montague presenting a cheque for £1,900 to Keith Cowieson of Songbird Survival

John Montague presenting a cheque for £1,900 to  Keith Cowieson of Songbird Survival

We were proud to have sponsored his memorial concert which included a host of musicians, songwriters and poets, including Richard Digance, Harvey Andrews, Bev Pegg, Hennesea , Roy Smith, and John Montague.

The concert raised £1,900 amount for Dave’s Family’s chosen charity ‘Songbird Survival’.



This gallery contains 10 photos.

Our guests had a great time at the ‘Radio 2 in the Park’ festival – aka a one-day Glastonbury for Radio 2 devotees. Rod Stewart was billed as the ‘headline act’ and certainly wooed the crowd with his energetic Celtic … Continue reading



Our guests had a wonderful time at the 20th BBC Proms in the Park – perhaps the greatest yearly celebration of wonderful music and British patriotism – all held together by the incomparable Sir Terry Wogan.

In the first half, we were treated to a star-studded line-up including Beverley Knight & Matt Cardle with the cast of Memphis, Russell Watson, trumpeter Alison Balsom, soprano Danielle de Niese,  Carma Emerald, and The Jacksons – who still can show us how to boogie!

Then we were whisked off to join the Royal Albert Hall to witness the best fervent sing-song in the land. I was hugely impressed with conductor Marin Alsop – who gave a memorable speech which included these lines:

“…I’m not going to pretend that music alone can change the world but, here tonight in this incredible hall with all of you here, I feel the power of music to unite us and to bring out the best that humanity has to offer. We have to reach out to those people who are struggling to be heard today. Let’s bring the sound of our voices together so that it reaches out to people everywhere to all of our brothers and sisters.

That is the great power of music..”

Finally, here are some extracts from our guests emails

When I think about being together it still feels wonderful inside

“We thoroughly enjoyed it and the event (+ your generous hospitality) is something which we shall always remember”

Here is a selection of our photo scrapbook of that wonderful evening.


The PRTC table with John C showing off his proms regalia!

Mary and Tam and the Welsh Dragon!

Mary and Tam and the Welsh Dragon!

All our guests line up

All our guests line up!

JC and the Proms Apron

JC and the Proms Apron

Peter & Patricia - all dressed up!

Peter & Patricia – all dressed up!

Carma Emerald

                     Caro Emerald

The Jacksons - Blame It On The Boogie

The Jacksons – Blame It On The Boogie

A great proms selfie by conductor Marin Alsop

A great proms selfie by conductor Marin Alsop

Fireworks finale

Fireworks finale


We were very pleased to be able to sponsor the first leg of West Ham Utd’s second round tie with Birkirkara FC. The Hammers rode out 1-0 against a heavily defensive Maltese side, with James Tomkins chesting the ball in from a well-struck corner from Mauro Zarate.

We (I) chose Mauro Zarate as our man of the match for his skilful display.

Presenting Man Of The Match Award to Mauro

Presenting Man Of The Match Award to Mauro

PRTC on the Big Screen

PRTC on the Big Screen

PRTC on the Big Screen 2!

PRTC on the Big Screen 2!

The Irons Pose!

The Irons Pose!