Jurisdiction(s):
United Kingdom

UKUT (TCC): EIS relief denied; trade not commenced; no fixed test; multi-factorial assessment applies (Putney Power and Piston Heating v HMRC)

Published on: 19 March 2026

Published by a LexisNexis Tax expert

Legal News

Article summary

Putney Power Ltd and another v Revenue and Customs Commissioners [2026] UKUT 105 (TCC)

What are the practical implications of the case?

This ruling confirms there is no definitive legal ‘test’ for pinpointing when a trade starts for EIS relief. The question set by statute is when a given taxpayer began carrying on its own trade, answered through a multi-factorial enquiry into the particular facts before the court, applying the legislation’s ordinary language. The judgment clarifies the proper approach whenever a statute calls for a multi-factorial assessment, with ramifications that extend far beyond the EIS sphere. It underscores that the enquiry is fact-sensitive, turns on the totality of the circumstances, and is steered by the legislation’s words, not any rigid checklist or bright-line rule. In undertaking such an exercise, the FTT may take account of relevant factors noted in earlier cases, but those points must not be treated as glosses on the statutory wording in issue. Further, when weighing the facts, the FTT should distinguish between decisions of other first-instance tribunals, which illustrate application of a similar statutory exercise, and rulings of superior courts, which supply binding guidance on how the statutory test should be applied.

What was the background?...

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