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What is ordinary share capital?

Andrew Cockman considers the implications of the decision in Stephen Warshaw v HMRC [2019] UKFTT 268 (TC).

Share capitalThe definition of ordinary share capital (OSC) is central to establishing the availability of entrepreneurs’ relief (ER). One of the primary tests is whether the employee or director (or other office holder) beneficially owns a minimum holding of 5% of the OSC of the company. Even though the 5% OSC test has been with us for some years, an increasing number of cases have come before the courts recently where the meaning of the term has been of key importance.

The ER legislation at s169S(5), TCGA 1992 provides that OSC has the same meaning as in s989, ITA 2007: