If BJS did have a duty to advise on the EIS consequences of the property transaction, should BJS have warned Mr Glucose that if the transaction were at an undervalue it would lead to a clawback of the EIS reliefs?

An adviser receiving the closure notice might well argue that a purposive interpretation of the relevant legislation would restrict the extent of the deeming provision of TCGA 1992, Sch 5B para 13 (10).

However, a reasonably competent tax adviser, called upon to give advice in relation to EIS deferral relief, would surely have advised that on a literal reading such a transaction at an undervalue would be a return of value, that there was a good chance both that HMRC would raise an assessment on the basis that there was a chargeable event under TCGA 1992, Sch 5B para 3 (1) (c) and that a court would confirm the assessment.

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