Although the taxpayer had agreed in principle with a Belgian company ("GB") that the shares of a joint venture company being established by them ("Homebase") would be held 70% by the taxpayer and 30% by GB, it was required that the taxpayer be the "beneficial owner" of 75% of the shares in order to be entitled to group relief in respect of losses of Homebase. Accordingly, the taxpayer subscribed for 75% of the shares and by separate option agreements of the same date the taxpayer granted GB a call option, and GB granted the taxpayer a put option, over 5% of the shares held by the taxpayer, such options not being exercisable for the first five years. In finding that the taxpayer was a beneficial owner of 75% of the shares, Lloyd L.J. noted (p. 188) that "'the beneficial owner' of shares ... means the equitable owner" and that "GB was not the equitable owner of five per cent of the shares which were the subject of the option agreement, since it could not claim specific performance until it had exercised its option under the agreement, and it could not exercise its option under the agreement until five years after the incorporation of Homebase ...".
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