Judgment summary
This decision concerns an application under rule 15(1)(c) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 by the Appellants, the Nigel Blackwell Family Trust and others, for permission to adduce expert evidence in a substantive appeal against HMRC (1).
The underlying appeal concerns whether a Loan and Security Agreement dated 6 November 2020 (the LSA) between Immunocore Ltd (IL) and Oxford Finance Luxembourg SARL (Oxford Finance) constituted a 'security' within the meaning of section 247(1)(a) Income Tax Act 2007 and paragraph 8(6) Schedule 5B Taxation of Chargeable Gains Act 1992 (3). If the LSA was a security, gains deferred under Enterprise Investment Scheme deferral relief crystallised when the Appellants' shares in IL were transferred to Immunocore Holdings plc; if not, the transfer formed part of a reconstruction and the deferred gains remained unrealised (3).
The Appellants sought permission to adduce expert evidence on whether realistic third-party purchasers existed for the LSA and whether a secondary market existed for loans of that nature (4). HMRC opposed the application, submitting that the characterisation of an instrument as a security depends on the characteristics of the debt viewed in its commercial context, and does not require proof of actual purchasers or an actual secondary market (5).
The Tribunal, applying the approach set out in HMRC v Healthspan Limited [2026] UKUT 00194 (TCC), refused the application (6, 8, 37).
Background
The appeal concerns the tax treatment of gains deferred under Enterprise Investment Scheme deferral relief, arising from the transfer of the Appellants' shares in Immunocore Ltd to Immunocore Holdings plc (3). The characterisation of the LSA between IL and Oxford Finance as a security or otherwise determines whether those deferred gains crystallised or remained unrealised (3).
The hearing took place on 13 July 2026 and lasted one day, with reference to an 859-page hearing bundle, a 507-page authorities bundle, and skeleton arguments from both parties (2).
Core dispute
The dispute was whether expert evidence concerning the marketability of the LSA, including the existence of realistic third-party purchasers and a secondary market for loans of that nature, was reasonably required to determine whether the LSA constituted a security (13).
The Appellants argued such evidence was necessary or reasonably required because HMRC's case proceeded on assumptions about hypothetical purchasers, their likely behaviour and the attractiveness of the LSA as an investment (4, 27). HMRC argued the statutory question turned on the characteristics of the debt in its commercial context, not on proof of actual purchasers or markets, and that the proposed evidence would add disproportionate cost and complexity (5).
Court findings
The Tribunal applied the four-stage test from HMRC v Healthspan Limited [2026] UKUT 00194 (TCC), asking what the pleaded issues were, whether expert evidence was necessary, whether it would nevertheless assist, and whether admitting it was proportionate (8, 11, 12).
The Tribunal found that the central pleaded issue was whether the LSA constituted a security, and that matters such as market participants, transaction costs, due diligence and purchaser motivations were not themselves pleaded issues requiring determination (13). No sufficiently defined issue of New York law requiring expert determination was identified (14).
The Tribunal held that expert evidence was not necessary to determine the issue, noting the proposed scope of evidence had not been identified with precision (15). Reviewing W T Ramsay Ltd v IRC [1982] AC 300 and Taylor Clark International Ltd v Lewis (Inspector of Taxes) [1998] STC 1259, the Tribunal concluded that the inquiry is into the characteristics of the debt viewed in its commercial context, and that neither authority established that proof of actual purchasers or an actual secondary market was a necessary element of the statutory test, nor that expert evidence was required for that purpose (16-23).
The Tribunal accepted the proposed evidence might provide some assistance, including in evaluating the Appellants' contention of no realistic purchaser, but held that this did not establish the evidence was reasonably required (25-26). The Tribunal found that HMRC's references to hypothetical purchasers formed part of a broader analysis of the LSA's characteristics rather than a separate factual issue requiring expert determination (28-29). Refusal of the application would not require the Tribunal to proceed on speculation, as the Appellants remained able to rely on documentary and factual evidence, cross-examination and submissions (30).
On proportionality, the Tribunal accepted the appeal involved substantial value, with tax consequences potentially extending to tens of millions of pounds, and that no substantive hearing date had yet been fixed, factors weighing in favour of permitting expert evidence (32). However, it concluded that the additional cost, complexity and burden of expert evidence, including possible responsive expert evidence from HMRC, outweighed those factors given the evidence was neither necessary nor reasonably required (33, 35).
Outcome
The Tribunal refused the Appellants' application for permission to adduce expert evidence (37). The Tribunal held that the Appellants had not discharged the burden of showing the proposed expert evidence was reasonably required to resolve the appeal (36). The decision records a right to apply for permission to appeal within 56 days under Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (38).
Major issues / areas of contention
- Whether the Loan and Security Agreement between Immunocore Ltd and Oxford Finance Luxembourg SARL constituted a 'security' under section 247(1)(a) Income Tax Act 2007 and paragraph 8(6) Schedule 5B Taxation of Chargeable Gains Act 1992.
- Whether expert evidence on the marketability of the LSA, including the existence of hypothetical purchasers and a secondary market, was necessary to resolve that issue.
- Whether, if not necessary, such expert evidence was nevertheless reasonably required having regard to the overriding objective and proportionality.
- The application of the test in HMRC v Healthspan Limited [2026] UKUT 00194 (TCC) to an application for permission to adduce expert evidence under rule 15(1)(c) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.
- Whether HMRC's reliance on hypothetical purchaser behaviour in its case transformed marketability into a separate factual issue requiring expert determination.