Links: Home | swarblaw - law discussions

swarb.co.uk - law index


These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.  














Corporation Tax - From: 2002 To: 2002

This page lists 12 cases, and was prepared on 27 May 2018.

 
Land Management Ltd v Fox [2002] STC (SCD) 152
2002
SCIT
Dr N Brice
Corporation Tax
The Commisioner was asked whether receipts of an associated company, The Share and Debenture Trust Ltd, were part of a business. The company did not trade, but owned shares in the taxpayer company and a freehold property. The Special Commissioner approached the matter by looking at each of the activities of the associated company and asking in respect of each activity whether it amounted to a business, and then by standing back and asking whether, viewed broadly, it was in each of the relevant years carrying on any business. She concluded that in each of the years the associated company carried on business in the managing and letting of property because the Memorandum of Association showed that it was incorporated for the purpose of carrying on or undertaking business of an investment nature, and in the relevant years (or some of them) payments were made by the associated company for insurance, repairs, renewals, and professional fees. It was also involved in the business of holding and making of investments. It did not only hold them but also paid administration expenses and distributed dividends to its shareholders. Consequently both the holding and the making of investments constituted the carrying on of business. It also made a loan to the taxpayer company, and the activity of making that loan and receiving interest amounted to the carrying on of business. Standing back and considering the activities of the associated company as a whole, the Special Commissioner concluded that in addition to receiving its four sources of income the associated company each year paid administration expenses including remuneration; paid the expenses of managing the residential properties; and distributed its profits to the shareholders. Overall, it was carrying on business in each relevant year.
Dr N Brice: "It is possible that, if the only activity carried on by the associated company in this appeal, were the receipt of interest from the deposit at the bank, then this might also have been one of the exceptional cases. However, in this appeal the other three activities of the associated company point to the conclusion that it was carrying on business in the relevant years."
1 Citers


 
Slater Ltd and others v Beacontree Commissioners for the General Purposes of Income Tax [2002] EWCA Civ 259
20 Feb 2002
CA
Robert Walker LJ
Taxes Management, Corporation Tax
Application for leave to appal against penalties imposed for failing to complay with notices requiring the production of documents to the Commissioners.
[ Bailii ]

 
 Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc; HL 20-Feb-2002 - Gazette, 21 March 2002; [2002] UKHL 6; Times, 25 February 2002; [2002] 1 WLR 671; [2003] 1 AC 1; [2002] 2 All ER 113; [2002] 2 Cr App R 9; [2002] HRLR 23; (2002) 166 JPN 431; (2002) 166 JP 333
 
Inland Revenue Commissioners v Laird Group plc Times, 22 May 2002; Gazette, 30 May 2002; [2002] EWCA Civ 576
30 Apr 2002
CA
Sir Andrew Morritt, Vice Chancellor, Lord Justice Mummery and Lord Justice Longmore
Corporation Tax
The taxpayer had sources of foreign income. Arrangements were made to take the benefit through the payment of interim dividends, which it intended to use to set off against liability for advance corporation tax. The Commissioner contended that these were a 'transaction in securities' Held: The payment of an interim dividend did fall within the definition of a transaction in securities, and was therefore taxable as such. A limitation could not be inferred on the wide words of the section even for fear that it might lead to injustice. The three conditions were required and met, a transaction in securities, prescribed circumstances and a consequential tax advantage.
Income and Corporation Taxes Act 1988 709(2)
1 Cites

1 Citers

[ Bailii ]
 
Taylor (Inspector of Taxes) v MEPC Holdings Ltd Times, 03 July 2002; Gazette, 08 August 2002; [2002] EWCA Civ 883; [2002] STC 997
20 Jun 2002
CA
Lord Justice Pill, Lord Justice Chadwick and Lord Justice Clarke
Corporation Tax
The taxpayer sought to include in the amounts to be set off by surrender against the group's liability for corporation tax, chargeable gains in respect of allowable losses of a preceding accounting period. They appealed a decision against them at first instance. Held: The 1988 Act clearly did not allow amounts to be set off which arose other than in the same accounting period. That restriction was not itself restricted only to trading and capital allowances, but included also sums of the type sought to be brought in by the taxpayer. The provisions have since been changed.
Income and Corporation Taxes Act 1988 433 - Taxation of Capital Gains Act 1992 8(1)
1 Cites

1 Citers

[ Bailii ]
 
Barrett (HM Inspector of Taxes) v Royal London Mutual Insurance Society Ltd [2002] STC 1020
5 Jul 2002
ChD
Peter Smith J
Corporation Tax, Insurance
Paragrapgh 57(2) of Schedule 8 to the Finance Act 1995, which provides that section 442A of the Taxes Act 1998 "does not apply in relation to the reinsurance of a policy or contract where the policy or contract was made, and the reinsurance arrangement effected, before 29 November 1994", provided an indication that the opening clause of paragraph 55(2) referred to the underlying policy or contract. A reinsurance contract was not a "policy or contract" within the relevant provisions.
Finance Act 1995 Sch8 Par55
1 Cites

1 Citers


 
Barclays Mercantile Business Finance Ltd v Mawson (Inspector of Taxes) Times, 26 August 2002; Gazette, 03 October 2002; [2002] EWHC Ch 1525; [2003] STC 66
22 Jul 2002
ChD
Park J
Corporation Tax, Taxes Management
The taxpayer sought to claim for capital allowances of £91 million for gas pipelines. The claimant had provided the equipment through a leasing scheme. Held: The leases were unusual, but did not appear to be merely part of a tax avoidance scheme. However, here the company already owned and operated the pipeline, and continued to do so after the arrangement. It owed the money before, and still owed it afterwards. The issue was whether the company had incurred the expenditure in provision of the pipeline, and practitioners should be careful not to lose themselves in the technical minutiae of the documentation. This was merely financial engineering, and did not qualify: "If corporation tax rates changed, the head lease rent payable to BMBF would change but the sublease rent payable by BGE (UK) would remain the same. If I have understood correctly how it would work, if the head lease rent went up BGE (UK) would still pay the full amount of the sublease rent to BMBF, and the balance of the (now) increased head lease rent would be paid by BGE to BMBF; if the head lease rent went down BGE (UK) would pay part of the sublease rent to BMBF (that part being equal to the (now) reduced head lease rent) and would pay the balance of the sublease rent to BGE."
Capital Allowances Act 1990 24(1)
1 Cites

1 Citers



 
 Dextra Accessories Ltd and others v Inspector of Taxes; SCIT 25-Jul-2002 - [2002] UKSC SPC00331; [2002] STC (SCD) 413
 
BMBF (No 24) Ltd v Inland Revenue Commissioners Times, 12 December 2002; Gazette, 23 January 2003
26 Nov 2002
ChD
Etherton J
Corporation Tax
Equipment in Illinois was transferred to a UK company within the same group, then sold and leased back in order to take advantage of capital allowances. The Act provided for a reduction in the allowance where machinery was let to a foreign company, but subsection 3 removed the allowance altogether where the machinery was not used for a qualifying purpose. Whilst the drafting may be deficient, it was the case that the provisions applied to sub-leases, and the arrangement was caught and was not effective.
Capital Allowances Act 1990 24 42(1) 42(2) 42(3)
1 Cites

1 Citers


 
Lankhorst-Hohorst GmbH v Finanzamt Steinfurt Times, 27 December 2002; C-324/00; [2002] EUECJ C-324/00; [2002] ECR I-11779; [2003] STC 607
12 Dec 2002
ECJ
Wathelet, President, Timmermans, Edward, Jann and Rosas JJ
European, Corporation Tax, Company
German law taxed interest paid on loan repayments made by a company against a loan from a shareholder, but only where the shareholder was not resident in the same country as the company. The tax authority took the view that the payments were a equivalent to a covert distribution of profits. Held: This was discriminatory, and offended the principal of freedom of establishment. It was wrong to compare the position of a company trading for profit with corporations exempt from corporation tax. Reduction in tax revenue is not an overriding reason in the public interest capable of justifying a measure contravening a fundamental principle.
1 Citers

[ Bailii ]
 
Barclays Mercantile Business Finance Ltd v Mawson, HM Inspector of Taxes [2002] STI 1809; [2002] EWCA Civ 1853; [2003] BTC 81; [2003] STC 66
13 Dec 2002
CA
Carnwath LJ
Corporation Tax, Taxes Management
The taxpayer entered into a sale and leaseback arrangement in respect of a gas pipeline, and sought to set off the costs as a capital allowance. Held: The company's appeal succeeded: "There is nothing in the statute to suggest that 'up-front finance' for the lessee is an essential feature of the right to allowances. The test is based on the purpose of the lessor's expenditure, not the benefit of the finance to the lessee."
1 Cites

1 Citers

[ Bailii ]
 
Inland Revenue Commissioners v John Lewis Properties Ltd Times, 16 January 2003; Gazette, 13 March 2003; [2002] EWCA Civ 1869; [2002] 1 WLR 35
20 Dec 2002
CA
Schiemann, Arden, Dyson LJJ
Capital Gains Tax, Corporation Tax
The taxpayer company purchased properties to be occupied by other companies within the same group. Having granted leases, they assigned the rental income for the first six years to a bank in return for a capital payment. They then sought relief from tax, claiming to have made a part disposal, and for roll-over relief. Held: The question of whether a receipt was income or capital is not susceptible to a simple rule of general application. Here factors affecting the decision were that the disposal was of a long lasting asset, the substantial value involved, the diminution of the value of the asset (despite that being impermanent), and that only one lump sum payment was made. The payment was a capital one.
Finance Act 2000 110 - Taxation of Chargeable Gains Act 1992 21(2)
1 Cites

1 Citers

[ Bailii ]
 
Copyright 2014 David Swarbrick, 10 Halifax Road, Brighouse, West Yorkshire HD6 2AG.