Income tax – ss 29 and 36 TMA 1970 – discovery assessment – Capital Allowances Act 2001 – expenditure on ‘plant and machinery’ whether deductible from income derived from HMO lettings – appellant asserted that expenditure claimed was restricted to communal areas – whether such areas formed part of ‘dwelling-house’ and therefore not ‘qualifying expenditure’ … Continue reading Tevfik v Revenue and Customs (Income Tax/Corporation Tax : Capital Allowances): FTTTx 24 Sep 2019
Corporation tax – capital allowances – ss11, 21, 23 Capital Allowances Act 2001 – expenditure on construction of a tails management facility at a nuclear site – identification of the assets – whether the assets function as plant – whether any of the expenditure is on the provision of a building within s21 CAA 2001 … Continue reading Urenco Chemplants Ltd and Another v Revenue and Customs (Corporation Tax – Capital Allowances): FTTTx 7 Aug 2019
The Act restricted the extent to which payment made for the hire of vehicles exceeding certain values could be deducted from profits when calculating tax. Autolease hired cars and then relet them to the public. On the sale of the company the question arose as to whether that restriction might apply only to those cars … Continue reading Lloyds UDT Finance Limited v Chartered Finance Trust Holdings Plc and others: ChD 22 Nov 2001
Corporation tax – capital allowances – sections 11 and 21-23 Capital Allowances Act 2001 – plant and machinery allowances on expenditure incurred in construction and rectification works on underground hydroelectric power scheme – water intakes, network of aqueducts leading to reservoir, underground headrace and tailrace, caverns housing the generating equipment and various other tunnels and … Continue reading SSE Generation Ltd v Revenue and Customs (Income Tax/Corporation Tax : Capital Allowances): FTTTx 31 Jul 2018
Although production of a new medical report, or of a new medical opinion, could evidence a relevant change of circumstances, to support the claim that the threshold had been reached so as to allow a review of a decision to grant benefits, it did not in itself suffice to constitute such a change, without which … Continue reading Cooke v Secretary of State for Social Security: CA 25 Apr 2001
The amount of loss available to a company for surrender was restricted to trading losses or capital allowances, and was not to include allowable losses. The sums to be surrendered were those which might appear in a calculation of profits for the period. Therefore allowable losses from previous years activities were not to be brought … Continue reading Taylor (Inspector of Taxes) v MEPC Holdings Ltd: ChD 12 Jun 2001
The fact that a payment of interest was made only to create a tax advantage did not prevent its being properly claimed. Interest was paid for the purposes of setting it against tax, when the debt was discharged. A company with substantial losses had . .
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CAPITAL ALLOWANCES – cost of fencing around business premises – was fencing for security of partners – no – special threat conditions not met – sec 33 Capital Allowances Act 2001 – appeal dismissed . .
Tonnage Tax – interpretation of Paragraph 85 Schedule 22 Finance Act 2000 – whether company leaving tonnage tax regime liable to balancing charge under Capital Allowances Act 2001 on sale of assets following exit – no – appeal dismissed . .
No re-opening after closure notices The taxpayer had purchased software licences (SLA), and set out to claim the full cost against its tax liabiilities under the 2001 Act in the first year. The taxpayer said that after the Revenue had issued closure notices, it was not able to re-open the assessments for the year in … Continue reading Revenue and Customs v Tower MCashback Llp 1 and Another: SC 11 May 2011
FTTTx CORPORATION TAX – capital allowances – plant and machinery – excavation support equipment hired out – design service – whether first year allowances available under Capital Allowances Act 2001 – yes – appeal allowed Citations: [2012] UKFTT 739 (TC) Links: Bailii Jurisdiction: England and Wales Corporation Tax Updated: 17 November 2022; Ref: scu.472746
FTTTx FILMS – Relief for expenditure on production – Deferments – Unconditional obligation to pay – Contracts between production company and individual members of production team – Claim for relief by Partnership – Deferred amounts payable to cast and crew as and when exploitation income was received from sales agent – No exploitation income received … Continue reading Alchemist (Devil’s Gate) Film Partnership v Revenue and Customs: FTTTx 5 Oct 2012
Capital allowances – Plant and machinery – security company -acquisition and installation of specialist security equipment- construction of control room – room contained within existing building – detailed specific requirements – reinforcing of walls and ceiling- interlock- work to entrance door and internal flooring-whether construction works were alterations incidental to installation Capital Allowances Act 2001 … Continue reading B and E Security Systems Ltd v Revenue and Customs: FTTTx 26 Mar 2010
Tax Credits – Child Tax Credit – no valid claim for capital allowance by the time Her Majesty’s Revenue and Customs made its decision on his entitlement to tax credits – not operating or carrying on any overseas property business at the time of the decision and expenditure on a property could not constitute a … Continue reading JQ v Her Majestys Revenue and Customs: UTAA 18 Jun 2020
UTTC INCOME TAX – section 38A Capital Allowances Act 2001 – annual investment allowance – exclusion where expenditure incurred in chargeable period in which trade permanently discontinued – whether trade discontinued at end of period was discontinued in that period – yes – appeal dismissed Citations: [2015] UKUT 383 (TCC) Links: Bailii Statutes: Capital Allowances … Continue reading Keyl v Revenue and Customs: UTTC 15 Jul 2015
Corporation Tax – Capital Allowances- eligibility of various structures of a hydroelectric power generation scheme for capital allowances – ss 11 and 21 to 23 Capital Allowances Act 2001. Citations: [2019] UKUT 332 (TCC) Links: Bailii Statutes: Capital Allowances Act 2001 Jurisdiction: England and Wales Corporation Tax Updated: 01 September 2022; Ref: scu.643800
Judges: Norris J Citations: [2009] EWHC 3400 (Ch) Links: Bailii Statutes: Capital Allowances Act 2001 45 Jurisdiction: England and Wales Contract, Torts – Other Updated: 14 August 2022; Ref: scu.401894
The taxpayer had sought to set off the entire cost of software licences against tax in the year of purchase, and challenged the re-opening of tax assessments after their closure by the Revenue. The Revenue appealed. Held: The Revenue could re-open the assessments, but the taxpayer was able to set off the expense as a … Continue reading Revenue and Customs v Tower MCashback Llp 1 and Another: CA 2 Feb 2010
The court considered the availablilty of a first year allowance for the full first year expenditure on software licence agreements. The revenue sought to bring new points on appeal. Held: The LLPs’ appeals on the procedural issue as to the re-opening of the assessments was allowed. Henderson J set out also why he would have … Continue reading Tower Mcashback Llp and Another v HM Revenue and Customs: ChD 13 Oct 2008
SCIT Capital expenditure on software – whether HMRC can raise additional contentions in an appeal beyond those indicated in the Closure Notice – whether expenditure was incurred pursuant to an unconditional contract – whether the expenditure paid 10 months after the date of the contract was still paid under a contract that required payment within … Continue reading Tower MCashback Llp1 and Llp2 v Revenue and Customs: SCIT 19 Jul 2007
The Revenue sought to disallow for industrial buildings allowance sums expended on warehouse premises which were to be used to store window products imported for use in other manufacturing processes. Held: The Revenue’s appeal succeeded. ‘The question under s.18(1) is whether the warehouse is in use for the purposes of a trade which consists in … Continue reading Revenue and Customs v Maco Door and Window Hardware (Uk) Ltd: ChD 19 Jul 2006
Citations: [2018] EWCA Civ 2348 Links: Bailii Statutes: Capital Allowances Act 2001 439 Jurisdiction: England and Wales Income Tax Updated: 05 July 2022; Ref: scu.628678
Corporation tax – capital allowances – finance lease of ship by Appellant – whether ship used for a qualifying purpose within terms of section 123(1) Capital Allowances Act 2001 – UK company taking bareboat charter of ship and hiring ship on time charter terms – whether ship let on charter in course of trade including … Continue reading Lloyds TSB Equipment Leasing (No 1) Ltd v Revenue and Customs: FTTTx 12 Jan 2012
CORPORATION TAX – capital allowances – expenditure on construction of a tails management facility at a nuclear site -whether items functioned as plant-application of functionality test in relevant business-whether expenditure on certain items was ‘on the provision of’ plant-whether items which were otherwise plant were ineligible for allowances because they were buildings-whether any items which … Continue reading Urenco Chemplants Limited and Urenco UK Limited v Revenue and Customs: UTTC 28 Jan 2022
UTTC CORPORATION TAX – Claim for capital allowances in respect of ships where the end sub-lease was to a non-UK resident user – Time charter to that end user granted by a UK resident company that claimed that its role (as the disponent owner under the time charter) satisfied the terms of section 123 Capital … Continue reading HM Revenue and Customs v Lloyds TSB Equipment Leasing (No1) Ltd: UTTC 14 Aug 2013
Corporation Tax – Capital allowances – s11 Capital Allowances Act 2001 – expenditure incurred on studies relating to the design and construction of offshore windfarms and their component parts including wind turbines and electrical cables – are the windfarms single items of plant – yes – in the alternative the wind turbines and electrical cables … Continue reading Gunfleet Sands Limited Gunfleet Sands II Limited Walney (UK) Offshore Windfarms Limite Dorsted West of Duddon Sands (UK) Limited v Revenue and Customs: FTTTx 3 Feb 2022
FTTTx Income tax – Closure Notice and Discovery Assessments – Sections 28B and 30B Taxes Management Act 1970 – Capital Allowances Act 2001 Sections 83 and 84 – whether cost of cars purchased by Appellant and provided to mini cab drivers for hire should be treated as fixed assets giving rise to capital allowances and … Continue reading Waterloo Car Hire (A Partnership) v Revenue and Customs: FTTTx 9 Nov 2016
FTTTx Income Tax/Corporation Tax : Capital Allowance – CORPORATION TAX – writing-down allowances – ships – Capital Allowances Act 2001 s 123(4) – whether obtaining of allowance ‘main object, or one of the main objects’ of the relevant transactions – yes – appeal dismissed [2015] UKFTT 401 (TC) Bailii Capital Allowances Act 2001 123(4) England … Continue reading Lloyds Bank Leasing (No1) Ltd v Revenue and Customs: FTTTx 14 Aug 2015
FTTTx CAPITAL ALLOWANCES – Business Premises Renovation Allowance – whether a former Church was a Qualifying Building as last been used for the purposes of a trade, profession or vocation – yes – whether a Vestry used as an office [whether or not for the purposes of a trade, profession or vocation] – yes. Capital … Continue reading Senex Investments Ltd v Revenue and Customs: FTTTx 4 Mar 2015
UTTC Income tax – Industrial buildings allowance – Commercial building in enterprise zone – Building leased by health board for use as laundry – Agreement with two other health boards for use of laundry by them in consideration of payment comprising share of total cost – Whether First-tier Tribunal entitled to find that building used … Continue reading Revenue and Customs v Thomson: UTTC 13 Aug 2014
FTTTx CAPITAL ALLOWANCES – Limited liability partnership; Annual Investment Allowance; whether an allowable deduction in computing the profits of the partnership; mixed partnership; company; whether Appellant a ‘qualifying person’; Capital Allowances Act 2001 section 38A; Income Tax Trading and Other Income Act 2005 section 863; Corporation Taxes Act 2009 section 1273 (2) [2014] UKFTT 888 … Continue reading Drilling Global Consultant Llp v Revenue and Customs: FTTTx 11 Sep 2014
FTTTx INCOME TAX – preliminary issue – Capital Allowances Act 2001 – annual investment allowance – whether trade permanently discontinued – if so, whether discontinuance was in the chargeable period in which expenditure incurred – appeal dismissed [2014] UKFTT 493 (TC) Bailii England and Wales Income Tax Updated: 05 December 2021; Ref: scu.526835
FTTTx Income Tax – Enterprise Zone – Industrial Buildings Allowance – whether a laundry building in an Enterprise Zone is a ‘commercial building’ – Yes – Sections 271 and 281 Capital Allowances Act 2001 – nature of ‘first use’ – Sections 305 and 307 – Appeal allowed [2013] UKFTT 468 (TC) Bailii England and Wales … Continue reading Thomson v Revenue and Customs: FTTTx 4 Sep 2013
References: [2015] UKUT 383 (TCC) Links: Bailii UTTC INCOME TAX – section 38A Capital Allowances Act 2001 – annual investment allowance – exclusion where expenditure incurred in chargeable period in which trade permanently discontinued – whether trade discontinued at end of period was discontinued in that period – yes – appeal dismissed Statutes: Capital Allowances … Continue reading Keyl v Revenue and Customs; UTTC 15 Jul 2015
References: [2013] UKUT 368 (TCC) Links: Bailii UTTC CORPORATION TAX – Claim for capital allowances in respect of ships where the end sub-lease was to a non-UK resident user – Time charter to that end user granted by a UK resident company that claimed that its role (as the disponent owner under the time charter) … Continue reading HM Revenue and Customs v Lloyds TSB Equipment Leasing (No1) Ltd; UTTC 14 Aug 2013
Cross loans were made between an investment company and pension schemes. The overall effect was to create payments which could be set off against Corporation Tax. They were not a pre-ordained series of transactions where the underlying loans were genuine, and the payments were made in respect of a genuine accrual of interest. Citations: Times … Continue reading McNiven (Inspector of Taxes) v Westmoreland Investments Ltd: CA 26 Oct 1998
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 … Continue reading Taylor (Inspector of Taxes) v MEPC Holdings Ltd: CA 20 Jun 2002
The Court was asked whether an employee’s remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself. Held: The company’s appeal failed. The purposive approach to the interpretation of the general … Continue reading RFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland: SC 5 Jul 2017
UBS AG devised an employee bonus scheme to take advantage of the provisions of Chapter 2 of the 2003 Act, with the sole purpose other than tax avoidance, and such consequential advantages as would flow from tax avoidance. Several pre-ordained steps were taken according to a detailed timetable. Once the structure of the scheme had … Continue reading UBS Ag and Another v Revenue and Customs: SC 9 Mar 2016
The applicant had obtained what it thought to be clearance from the Revenue for a complex scheme, whose effectiveness depended on whether investors would qualify for capital allowances. The Inspector initially gave a favourable assurance, but that was subsequently withdrawn. Held: The taxpayer’s application failed. A tax clearance certificate was properly withdrawn for a failure … Continue reading Regina v Inland Revenue Commissioners Ex Parte Matrix Securities Ltd: HL 14 Mar 1994
The father challenged a ruling that in calculating his liability to pay child support he was not entitled first to deduct, as a self-employed person, all the allowances he might claim against income tax by way of capital allowances. Held: The legislation is sloppy, muddled and would lead to unjust and absurd results. Nevertheless the … Continue reading Smith v Smith and Another: CA 19 Oct 2004
SCIT INCOME TAX – Anti-Avoidance – Relevant discounted security – Loss on gift to wife – Subscription for security and gift part of scheme to produce loss – Avoidance not the Appellant’s sole purpose in subscribing – Ramsay (1982), Westmoreland (2003) and Arrowtown (2003) considered – FA 1996, Sch 13, para 2 – Appeal allowed … Continue reading Campbell v Inland Revenue Commissioners: SCIT 6 Jul 2004
The taxpayer, a non-resident, operated a sale and lease back scheme of machinery to be used in its business within the UK. There had been a chain of leases. Held: The court had first to identify the ‘relevant lease’. It was the head lease which was the lease of the machinery on which the expemse … Continue reading BMBF (No 24) Limited v the Commissioners of Inland Revenue: CA 6 Nov 2003
Charitable Company- Directors’ Status and Duties A married couple set up a charitable foundation to assist children in developing countries. When the marriage failed an attempt was made to establish a second foundation with funds from the first, as part of W leaving the Trust. Court approval was obtained, but the court ordered the remaining … Continue reading Lehtimaki and Others v Cooper: SC 29 Jul 2020
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the pleaded facts, Mr Chopra and Mr Nazir were the directing organ of Bilta under its constitution. … Continue reading Jetivia Sa and Another v Bilta (UK) Ltd and Others: SC 22 Apr 2015
The taxpayers used schemes to create allowable losses, and now appealed assessment to tax. The schemes involved a series of transactions none of which were a sham, but which had the effect of cancelling each other out. Held: If the true nature of the transactions could be seen by looking at them all together, then … Continue reading W T Ramsay Ltd v Inland Revenue Commissioners: HL 12 Mar 1981
Recognition of illegitimate children The complaint related to the manner in which parents were required to adopt their own illegitimate child in order to increase his rights. Under Belgian law, no legal bond between an unmarried mother and her child results from the mere fact of birth. A recognised ‘illegitimate’ child’s rights of inheritance on … Continue reading Marckx v Belgium: ECHR 13 Jun 1979
The respondent’s child lived with the estranged father for most of each week. She was obliged to contribute child support. She now lived with a woman, and complained that because her relationship was homosexual, she had been asked to pay more than someone in a heterosexual relationship. Held: The claim failed. The regulations had now … Continue reading Secretary of State for Work and Pensions v M: HL 8 Mar 2006
Duty of Fairness to taxpayer – Written Assurance The applicant was assured by the Inland Revenue that it would not raise further inquiries on certain tax affairs if he agreed to forgo interest relief which he had claimed and to pay a certain sum in capital gains tax. Held: Where the lawfulness of the section … Continue reading Regina v Inland Revenue Commission ex parte Preston; In re Preston: HL 1984
The revenue wished to refuse a claim to set off input tax for two transactions involving the alleged purchase of software. They said the transactions were a sham. Held: The revenue’s appeal failed. Briggs J said: ‘the critical question whether a transaction which, as documented, appears to attract certain VAT consequences is to be deprived … Continue reading Revenue and Customs v Dempster (T/A Boulevard): ChD 24 Jan 2008
The applicant contended that the 1991 Act infringed her human rights in denying her access to court to obtain maintenance for her children. Held: The applicant had no substantive right to take part in the enforcement process in domestic law which is capable in Convention law of engaging the guarantees in it. ‘Sympathetic though one … Continue reading Kehoe, Regina (on the Application of) v Secretary of State for Work and Pensions: HL 14 Jul 2005
Conditions for new evidence on appeal At the trial, the wife of the appellant’s opponent said she had forgotten certain events. After the trial she began divorce proceedings, and informed the appellant that she now remembered. He sought either to appeal admitting fresh evidence, or for a retrial. Held: The Court of Appeal refused to … Continue reading Ladd v Marshall: CA 29 Nov 1954
(Hong Kong Final Court of Appeal) The court was asked as to the accounting treatment of interests incurred in the development for the purpose of generating the profits, and therefore whether the relevant Ordinance prohibited the capitalisation of interest for the purpose of computing the taxpayer’s assessable profits and allowable deductions. Held: Where schemes involve … Continue reading Collector of Stamp Revenue v Arrowtown Assets Ltd: 4 Dec 2003
The company had paid substantial sums out in establishing a gas pipeline, and claimed those sums against its tax as capital allowances. The transaction involved a sale and leaseback arrangement which the special commissioners had found to be a pre-arranged series created only for a tax advantage, and the judge at first instance agreed saying … Continue reading Barclays Mercantile Business Finance Ltd v Mawson (HM Inspector of Taxes): HL 25 Nov 2004
The purchaser of land created a sub-sale and leaseback with bank so as to fund the purchase in a manner which would comply with Islamic finance principles. The Court was now asked whether purchaser or the bank were liable for stamp duty land tax on . .
References: [2003] HKCFA 52, [2004] 1 HKLRD 77, (2003) 6 HKCFAR 517, ACV 4/2003 Links: Hklii Coram: Ribeiro PJ, Lord Millett NPJ Ratio: (Hong Kong Final Court of Appeal) The court was asked as to the accounting treatment of interests incurred in the development for the purpose of generating the profits, and therefore whether the … Continue reading Collector of Stamp Revenue v Arrowtown Assets Ltd; 4 Dec 2003
