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.’
Carnwath LJ said that taxing statutes generally ‘draw their life-blood from real world transactions with real world economic effects’. Secondly, the prodigious intellectual effort in support of tax avoidance results in transactions being structured ‘in a form which will have the same or nearly the same economic effect as a taxable transaction but which it is hoped will fall outside the terms of the taxing statute’. He continued: ‘It is characteristic of these composite transactions that they will include elements which have been inserted without any business or commercial purpose but are intended to have the effect of removing the transaction from the scope of the charge.’
Judges:
Carnwath LJ
Citations:
[2002] STI 1809, [2002] EWCA Civ 1853, [2003] BTC 81, [2003] STC 66
Links:
Jurisdiction:
England and Wales
Citing:
Appeal from – Barclays Mercantile Business Finance Ltd v Mawson (Inspector of Taxes) ChD 22-Jul-2002
The taxpayer sought to claim for capital allowances of andpound;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 . .
Cited by:
Appeal from – Barclays Mercantile Business Finance Ltd v Mawson (HM Inspector of Taxes) HL 25-Nov-2004
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 . .
Cited – Gaines-Cooper v HM Revenue and Customs ChD 13-Nov-2007
The parties disputed the domicile of the tax-payer. He had a domicile of origin in the UK, but asserted that he had acquired a domicile of choice in the Seychelles. The Special Commissioners had allowed, in assessing the domicile at any time, of . .
Cited – RFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland SC 5-Jul-2017
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 . .
Lists of cited by and citing cases may be incomplete.
Corporation Tax, Taxes Management
Updated: 16 August 2022; Ref: scu.188983