National Westminster Bank Plc and Another v Inland Revenue Commissioners: HL 24 Jun 1994

Shares are allotted to a person when that person acquires an unconditional right to be entered on a company’s register of members. The issue of shares only becomes complete after they are registered in the company’s books for the purposes of the BES scheme.
Lord Templeman said: ‘The Act of 1985 preserves the distinction in English law between an enforceable contract for the issue of shares (which contract is constituted by an allotment) and the issue of shares which is completed by registration. Allotment confers a right to be registered. Registration confers title. Without registration, an applicant is not the holder of a share or a member of the company: the share has not been issued to him . . No person can be a shareholder until he is registered. A person who is not a shareholder by registration cannot claim that the share has been issued to him . .’ and
‘A person who has been allotted shares is in as good a position in equity as a person to whom shares have been issued but that does not mean that there is no distinction between allotment and issue’ and
‘. . The certificate declares to all the world that the person who is named in it is the registered holder of certain shares in the company and that the shares are paid up to the extent therein mentioned . . ‘
HL Income Tax – Reliefs – Business expansion scheme – Relief precluded for a scheme involving loan facilities where shares issued on or after 16 March 1993 – Applications for shares processed, cheques presented for payment, allotments made, and applicants notified by that date, but registration in companies registers of members taking place later – Whether shares issued before 16 March – Income and Corporation Taxes Act 1988, ss 289, 299A, 311(1) – Finance Act 1988, s 50.


Lord Templeman, Lord Lloyd of Berwick


Gazette 07-Sep-1994, Times 24-Jun-1994, Ind Summary 25-Jul-1994, [1994] 3 All ER 1, [1995] 1 AC 119, [1994] UKHL TC – 67 – 1




Income and Corporation Taxes Act 1988 289 299A, Companies Act 1985 738


England and Wales


Appeal fromNational Westminster Bank Plc and Another v Inland Revenue Commissioners CA 10-Jan-1994
Shares in Business Expansion Scheme were not to be treated as issued until they were entered in the company’s share register. The scheme was ineffective being a scheme to avoid Income Tax by financial manipulation. . .
At First InstanceNational Westminster Bank Plc and Another and Barclays Bank Plc and Another v Inland Revenue Commissioners ChD 6-Aug-1993
A business expansion tax plan was valid if it was issued before the Income and Corporation Taxes Act. Shares were issued on the sending of the allotment letter, not when the shares came to be registered in the company’s books. . .

Cited by:

CitedBermuda Cablevision Limited and others v Colica Trust Company Limited PC 6-Oct-1997
(Bermuda) An alternative remedy to winding up is available to a shareholder where oppressive conduct is alleged, though the main thrust is that the conduct is unlawful. . .
CitedEckerle and Others v Wickeder Westfalenstahl Gmbh and Another ChD 23-Jan-2013
By acting together, two shareholders had first refused the proposed dividend, and replaced the board. They then acquired fiurther shares and achieved a majority of more than 75%, sufficient to pass a special resolution, and proposed the cancellation . .
CitedMichael Wilson and Partners Ltd v Emmott ComC 8-Jun-2011
The claimant challenged an arbitration award made concerning the agreement under which the defendant had been admitted to partnership. MWP contended that the Tribunal were guilty of a large number of serious irregularities in their conduct of the . .
Lists of cited by and citing cases may be incomplete.

Company, Income Tax, Income Tax

Updated: 19 May 2022; Ref: scu.84207