National Westminster Bank Plc v Inland Revenue Commissioners

The appeal concerned whether relief under the business expansion scheme was available where the relevant shares were said to have been issued before 16 March 1993. The court considered the timing of events (applications processed, cheques presented, allotments made and applicants notified) against the date of registration in the company's register of members. The House of Lords held that relief was precluded where the shares were, in law, issued on or after 16 March 1993. The court considered provisions of the Income and Corporation Taxes Act 1988 (sections 289, 299A and 311(1)) and section 50 of the Finance Act 1988 in reaching its conclusion.

This case concerned entitlement to tax relief under a business expansion scheme. The taxpayer sought relief in respect of shares acquired under a scheme involving loan facilities. The factual background was that applications for the shares had been processed, cheques had been presented for payment, allotments had been made and applicants had been notified by 16 March 1993, but formal registration in the companies' registers of members took place at a later date.

The primary legal issue was whether the shares were to be regarded as "issued" before 16 March 1993 for the purpose of claiming relief under the business expansion scheme, or whether they were issued on or after that date so as to preclude relief. The House of Lords examined the relevant statutory provisions (Income and Corporation Taxes Act 1988, ss. 289, 299A, 311(1); Finance Act 1988, s. 50) and determined that relief was precluded because the shares were issued on or after 16 March 1993. The court treated the timing of registration and the formal legal concept of issue as determinative rather than the earlier administrative steps.

Appeal dismissed. The House of Lords held that relief under the business expansion scheme was precluded because the shares in question were issued on or after 16 March 1993; earlier processing, payment, allotment and notification did not amount to issue prior to that date. The decision was founded on the court's construction of the relevant statutory provisions (Income and Corporation Taxes Act 1988, ss 289, 299A, 311(1) and Finance Act 1988, s 50).