Other Citywire websites
Stay connected:

View the article online at http://citywire.co.uk/new-model-adviser/article/a593936

HMRC claims victory in £4m Blackpool FC EIS case

by William Robins on Jun 06, 2012 at 12:58

HMRC claims victory in £4m Blackpool FC EIS case

HM Revenue & Customs (HMRC) has won a battle to deny tax relief to an enterprise investment scheme (EIS) related to Blackpool Football Club.

The Upper Tribunal has dismissed an appeal by Segesta, the holding company for Blackpool FC, over the blocking of capital gains tax relief on a £4 million investment.

The case relates to the transfer of £4 million among companies linked to the football club. In 1999, Segesta borrowed £4 million from NatWest bank, which was transferred to Blackpool’s bank account. Blackpool then paid £4 million to Segesta’s principal shareholder, Owen Oyston, who transferred the money to Segesta by buying 276,494 ordinary £1 shares in the company at £15 per share. Segesta then used the money to pay off the NatWest loan.

Oyston claimed CGT relief on the investment in Segesta. He claimed Segesta qualified as an EIS meaning his investment in it, a subscription of shares, qualified for relief. However, HMRC claimed the shares were ineligible under EIS rules due to the benefit Oyston received from the transaction. Shares are ineligible for EIS investment relief where the subscriber receives value from the company being invested in at any time during seven years after the investment.

HMRC said that Oyston benefitted from the investment, as it allowed Segesta to provide Blackpool with funds to repay loans made on Oyston’s behalf. It added that another loan Oyston was due, from a company called Zebaxe which provided administration services for Segesta, was repaid due to the investment. The Upper Tribunal upheld HMRC’s verdict.

The money owed from Zebaxe related to the fallout from funds stolen from one of Oyston’s other companies, Jebwill, in the late nineties. Oyston served a three-and-a-half year prison sentence for the rape and indecent assault of a 16-year-old girl between 1996 and 1999, and during that time, a Jebwill employee, Robin Oakley, stole from the company, which was owned jointly by Oyston and the Derbyshire County Council pension fund. In December 1999 Oyston took personal liability for the sums lost from Jebwill and acquired a right to repayment from Zebaxe.

7 comments so far. Why not have your say?

Paul Howard

Jun 06, 2012 at 13:17

Sounds like a bit of common sense...

I borrow here, move it to there....and repay the loan....and can i have some Tax relief please.

Although not sure what the prison sentance stuff has got to do with this article.......

report this

Mark Courage

Jun 06, 2012 at 15:01

And then there is West Ham just to really rub salt in to the wounds!!

report this

Chris Robertson

Jun 06, 2012 at 17:18

Now Charlie Adam was transferred from Glasgow Rangers Fc (EBTs) to Blackpool !!!!!!!

Any connection !!! Is Blackpool an offshore tax haven ????????????!!!!!

report this

Bob Donaldson

Jun 06, 2012 at 17:35

I wonder if he is going to make a complaint against the advisors of this scheme?

report this

Bob Donaldson

Jun 06, 2012 at 17:35

He was always on shakey ground in Blackpool!

report this

Chris James

Jun 11, 2012 at 11:58

Bob - Why the dig at Blackpool? Location is not relevant

report this

Bob Donaldson

Jun 11, 2012 at 12:29

You missed the point Chris - Wasn't Blackpool the place that had the earthquake as a result of Shale gas extraction!. Trying to be lighthearted about things in these trying times.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Opportunities emerge as production moves back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

A spotlight on Alastair Mundy


Alastair Mundy met Citywire's Daniel Grote at the London Stock Exchange Studios for a detailed interview about the Investec Cautious Managed fund.


Read more...

FOS appoints new chief executive

by Michelle Abrego on Jul 23, 2014 at 15:04

Sorry, this link is not
quite ready yet