The tribunal refused an appeal against a closure notice issued by HMRC against M Group Holdings Limited for a substantial shareholding exemption (SSE) for £10.6m. The claim related to relief from corporation tax on chargeable gains arising on the sale of a shareholding in a subsidiary company as the group had not existed for 12 months before the disposal.

M Group Holdings, which has NHS contracts to provide services to hospitals and clinics, appealed the First Tier Tribunal (FTT) decision.

The central issue in this case concerned the meaning of the term ‘group’ and whether the shares had indeed been held for a continuous 12-month period.

On 29 June 2015, the appellant incorporated Medinet Clinical Services Limited (MCS), a private company limited by shares, as its wholly owned subsidiary.