Volkerrail Plant Ltd and Others v Revenue and Customs: FTTTx 16 Nov 2020

Income Tax/Corporation Tax – Group Relief – Whether s 403D(1)(c) Income and Corporation Taxes Act 1988 unlawful restriction on freedom of establishment – If so, whether it should be disapplied or a conforming construction applied – Appeals allowed

Citations:

[2020] UKFTT 476 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 21 May 2022; Ref: scu.656873

Walker (Her Majesty’s Inspector of Taxes) v Centaur Clothes Group Limited: HL 16 Mar 2000

Where a company which had ceased trading and fallen outside the tax regime, subsequently declared a dividend, it was deemed to be a new accounting period, and the dividend did fall to be taxed, and any advance corporation tax could be set off against any corporation tax payments made whilst previously trading.
Lord Hoffmann said: ‘I seldom think that an argument from redundancy carries great weight, even in a Finance Act. It is not unusual for Parliament to say expressly what the courts would have inferred anyway.’

Judges:

Lord Hoffmann

Citations:

Times 07-Apr-2000, [2000] 1 WLR 799, [2000] UKHL 23, [2000] 2 All ER 589

Links:

House of Lords, House of Lords, Bailii

Statutes:

Income and Corporation Taxes Act 1988 12(2)(a)

Jurisdiction:

England and Wales

Citing:

Appeal fromWalker (Inspector of Taxes) v Centaur Clothes Group Ltd CA 25-Jun-1998
After the transfer of a business to a subsidiary with payment left outstanding and no provision for interest but receiving dividends, it was not able to recover Advance Corporation Tax on that payment since it was no longer trading and had no income . .

Cited by:

CitedEvans Dorothy, Regina v CACD 6-Dec-2004
The defendant appealed her conviction for having breached a restraining order under the 1997 Act. The order required her not to be ‘abusive by words or actions’ towards her neighbour. She had regularly parked her car so as to block her neighbour’s . .
CitedO’Brien v Department for Constitutional Affairs CA 19-Dec-2008
The claimant was a part time recorder. He claimed to be entitled to a judicial pension.
Held: The Employment Appeal Tribunal was wrong to find an error of law in the decision of the Employment Tribunal to extend time; but the court declined to . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 20 May 2022; Ref: scu.131544

Walker (Inspector of Taxes) v Centaur Clothes Group Ltd: CA 25 Jun 1998

After the transfer of a business to a subsidiary with payment left outstanding and no provision for interest but receiving dividends, it was not able to recover Advance Corporation Tax on that payment since it was no longer trading and had no income source.

Citations:

Gazette 09-Sep-1998, [1998] EWCA Civ 1098

Statutes:

Income and Corporation Taxes Act 1988 239

Jurisdiction:

England and Wales

Cited by:

Appeal fromWalker (Her Majesty’s Inspector of Taxes) v Centaur Clothes Group Limited HL 16-Mar-2000
Where a company which had ceased trading and fallen outside the tax regime, subsequently declared a dividend, it was deemed to be a new accounting period, and the dividend did fall to be taxed, and any advance corporation tax could be set off . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 20 May 2022; Ref: scu.90242

Regina v Dimsey; Regina v Allen: CA 14 Jul 1999

A deeming section could create a taxation liability, even where the liability appeared to be duplicated. The clause under which the foreign income of a company came to be chargeable did not affect the existing liability to pay tax on the sums so charged, and charges of conspiracy to cheat the public revenue stood by seeking to evade such additional taxation. Laws LJ: ‘However, it is plain from authorities cited by the Crown that the corporate veil may fall to be lifted where companies are used as a vehicle for fraud. Here the companies in question were the appellant’s alter ego’.

Judges:

Laws LJ

Citations:

Times 14-Jul-1999, Gazette 28-Jul-1999, [2000] QB 744, [1999] EWCA Crim 1917, [1999] EWCA Crim 1917, [2000] 1 Cr App R (S) 497

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988 739(2) 831(1)(b)

Jurisdiction:

England and Wales

Cited by:

CitedRegina v Smith (David Cadnam) HL 13-Dec-2001
Smith had bought a motor vessel, The Vertine, with andpound;55,000 provided by his co-defendant, John Marriott. In the words of the judge when imposing sentence, the respondent allowed himself to be used as Marriott’s ship owner and captain. The . .
CitedWalkley v Precision Forgings Ltd HL 1979
The plaintiff tried to bring a second action in respect of an industrial injury claim outside the limitation period so as to overcome the likelihood that his first action, although timeous, would be dismissed for want of prosecution.
Held: He . .
CitedRegina v Foggon CACD 14-Feb-2003
The defendant appealed against a confiscation order, after conviction for cheating the public revenue. Funds had been diverted from his company to avoid payment of taxes.
Held: Tax which was avoided would fall under the section and be a . .
CitedRegina v Stannard CACD 1-Nov-2005
The defendant had been convicted of offences in which he had operated to purchase companies and use false debentures to evade corporation tax. Compensation had been sought under the 1988 Act. It was argued that the confiscation order should be . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 19 May 2022; Ref: scu.85225

Hillsdown Holdings Plc and HF Meat and Foods Processing Pension Scheme Trustees Limited v Commissioners of Inland Revenue: ChD 13 May 1999

A payment made out of a pension scheme which had subsequently been found unlawful and ordered to be repaid, was not a taxable payment as such. The payment had been made in good faith and on advice.

Citations:

Times 13-May-1999, [1999] EWHC Admin 219

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988 601

Corporation Tax, Financial Services

Updated: 19 May 2022; Ref: scu.81384

Imperial Chemical Industries Plc v Colmer (Inspector of Taxes) (No 2): HL 18 Nov 1999

Where a group of companies sought consortium group relief, but the majority of the companies within the group were based outside the European Union, the court need not apply European Union standards to the test, but could instead apply the standards appropriate to the UK, and accordingly refuse the relief.

Citations:

Times 24-Nov-1999, Gazette 01-Dec-1999, [1999] 1 WLR 2035, [1999] UKHL 48, [1999] UKHL TC – 72 – 1

Links:

House of Lords, House of Lords, House of Lords, Bailii, Bailii

Statutes:

Income and Corporation Taxes Act 1988 258 (5) (b)

Citing:

At ECJImperial Chemical Industries v Colmer ECJ 16-Jul-1998
A member state was not allowed to impose a tax regime which discriminated against the subsidiaries of a company based in that state where they were based in other member states, but discrimination was allowed where the subsidiaries were based . .

Cited by:

CitedAutologic Holdings Plc and others v Commissioners of Inland Revenue HL 28-Jul-2005
Taxpayer companies challenged the way that the revenue restricted claims for group Corporation Tax relief for subsidiary companies in Europe. The issue was awaiting a decision of the European Court. The Revenue said that the claims now being made by . .
CitedFoulser and Another v HM Inspector of Taxes ChD 20-Dec-2005
The taxpayer company entered into an arrangement in which shares were purchased by a company based in Ireland and resold. A claim was made for holdover relief.
Held: The scheme failed. The restriction imposed did not infringe the right of . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax, European, Company

Updated: 19 May 2022; Ref: scu.81594

Ensign Tankers (Leasing) Ltd v Stokes (Inspector of Taxes): HL 6 May 1992

The appellants entered into partnerships with a film production company. By doing so they intended to make available to themselves first year allowances on the capital expenditure incurred. Loan agreements protected them from any eventual loss.
Held: Money which had been spent mainly for trading had the benefit of the tax allowances whatever the motive behind for structure of the transactions. Even if a fiscal motive was the sole or paramount motive for a transaction, that would not deprive the action of its proper nature. The legal effect was of a trading transaction with a capital expenditure, and the case was remitted for consideration on that basis. A composite transaction which could fairly be described as involving a ‘conjuring trick’, artificiality and self-cancelling elements, should nonetheless not be called a sham, in the relevant sense.

Judges:

Lord Goff of Chieveley

Citations:

Gazette 06-May-1992, [1992] 1 AC 655, [1992] CLY 611, [1992] 2 WLR 469, [1992] STC 226

Jurisdiction:

England and Wales

Citing:

AppliedCraven (IOT) v White (Stephen); Inland Revenue Commissioners v Bowater Property Developments HL 1989
In Craven, the taxpayers owned shares in Q Ltd. In early 1976 they began to negotiate with C Ltd for a merger of the two companies and steps were taken to establish an Isle of Man holding company to act as a vehicle for the taxpayers’ shares should . .
CitedW T Ramsay Ltd v Inland Revenue Commissioners HL 12-Mar-1981
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 . .

Cited by:

CitedNew Angel Court Ltd v Adam (Inspector of Taxes) ChD 25-Jul-2003
The taxpayer company employed a subsidiary company through which it conducted its trade in land. It then sought to represent the profits from that subsidiary within its own accounts as trading profits for corporation tax purposes. The commissioner . .
CitedRevenue and Customs v Dempster (T/A Boulevard) ChD 24-Jan-2008
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 . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 19 May 2022; Ref: scu.80334

Eagerpath Ltd v Edwards (Inspector of Taxes): ChD 21 May 1999

Once a dispute on an assessment has been settled between the taxpayer and the Inspector, the taxpayer cannot subsequently appeal against refusal of relief for a claim of an error. There was no point of law in such an error.

Citations:

Times 21-May-1999

Statutes:

Taxes Management Act 1970 54 33

Citing:

Appealed toEagerpath Ltd v Edwards (HM Inspector of Taxes) CA 14-Dec-2000
Where the special commissioner had determined that the dispute had been concluded by agreement, the taxpayer was precluded from appealing that decision claiming an ‘error or mistke’ That issue was not one relating to the computation of profits in . .

Cited by:

Appeal fromEagerpath Ltd v Edwards (HM Inspector of Taxes) CA 14-Dec-2000
Where the special commissioner had determined that the dispute had been concluded by agreement, the taxpayer was precluded from appealing that decision claiming an ‘error or mistke’ That issue was not one relating to the computation of profits in . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 19 May 2022; Ref: scu.80205

Carr (Inspector of Taxes) v Armpledge Ltd; Same v Fielden and Ashworth Ltd: CA 24 May 2000

Where a company sought to claim reliefs going back over different tax years, there was no rule requiring such reliefs to be claimed chronologically, but the company could arrange the claims against the several tax years as they best thought fit. There was no express power to order them, but the test was the absence of any law requiring a particular order to be used. The section dealt with only one claim, and said nothing about how two claims should be ordered.

Citations:

Times 24-May-2000, [2000] EWCA Civ 156

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988 239(3)

Jurisdiction:

England and Wales

Citing:

Appeal fromCarr (Inspector of Taxes) v Armpledge Ltd; Same v Fielden and Ashworth Ltd ChD 12-Oct-1998
A company’s settlement of its tax affairs had to be dealt with in chronological order even though it would be from it’s point of view more tax efficient to have them dealt with in reverse order. No right of choice was given to a taxpayer. . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 19 May 2022; Ref: scu.78912

Nijjar Dairies Ltd v The Commissioners Revenue and Customs: FTTTx 14 Aug 2013

FTTTx Corporation tax – preliminary issue – was discovery determination under paragraph 41(2) Schedule 18 FA 1998 made within time limit – no – appeal against information notice under Schedule 36 FA 2008 – were taxpayer’s records statutory records – yes – appeal struck out in part – were other information and documents reasonably required for purposes of checking taxpayer’s tax position – yes – appeal dismissed and notice confirmed

Citations:

[2013] UKFTT 434 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 19 May 2022; Ref: scu.515218

Bradley (Inspector of Taxes) v London Electricity Plc: ChD 1 Aug 1996

A distinction is to be found between the construction of plant and the equipment installed. The Court should examine the function of a structure to decide if it was a plant or a building for allowance.

Citations:

Gazette 09-Oct-1996, Times 01-Aug-1996

Statutes:

Capital Allowances Act 1990 24

Corporation Tax

Updated: 18 May 2022; Ref: scu.78546

In re Mesco Properties Ltd: ChD 1979

The court considered whether corporation tax had to be paid as an expense of the liquidation in priority to other claims. In that case it had arisen not on profits but on chargeable gains, on sales of the company’s properties after the commencement of the winding up.
Held: ‘section 243(2) of the Income and Corporation Taxes Act 1970 [now section 8(2) of the 1988 Act] expressly enacts that a company is chargeable to corporation tax on a capital gain arising in the winding up. It follows that the tax is a charge which the liquidator is bound to discharge by payment to the extent that assets are available. It is, therefore, to my mind, beyond argument that the payment of the tax is a ‘necessary disbursement’ of the liquidator and must come within the fifth paragraph of rule 195(1) . . ‘

Judges:

Brightman J

Citations:

[1979] 1 WLR 558

Statutes:

Income and Corporation Taxes Act 1988 8(2)

Jurisdiction:

England and Wales

Cited by:

ApprovedKahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc HL 20-Feb-2002
A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was . .
Appeal fromIn re Mesco Properties Ltd CA 1980
Tax legislation provided that the company was chargeable to corporation tax on a capital gain arising in the winding up.
Held: The appeal failed. It was a tax which the liquidator was bound to discharge by payment, and the payment was a . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Corporation Tax

Updated: 16 May 2022; Ref: scu.182552

Inland Revenue v The Westleigh Estates Co Ltd; Inland Revenue v The South Behar Railway Co Ltd; The Inland Revenue v The Eccentric Club, Ltd: HL 19 Feb 1925

Corporation Profits Tax – Company carrying on trade or business or similar undertaking – Company formed for more convenient administration of family estates-Company in receipt of annuity as consideration for constructing a railway. – Company carrying on social club-Mutual trading concern-Finance Act, 1920 (10 and 11 Geo. V, c. 18), Section 52.

Citations:

[1925] UKHL TC – 12 – 657

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 16 May 2022; Ref: scu.633844

Gloucester Rly Carriage and Wagon Co Ltd v Inland Revenue: HL 19 Feb 1925

Corporation Profits Tax – Company manufacturing wagons for sale or hire – Whole stock of wagons used for hire sold at a profit – Whether capital accretion or profits of trade-Finance Act, 1920 (10 and 11 Geo. V, c. 18), Sections 52 and 53.

Citations:

[1925] UKHL TC – 12 – 720

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 16 May 2022; Ref: scu.633843

Shop Direct Group and Others v HM Revenue and Customs: ChD 19 Apr 2013

Citations:

[2013] EWHC 942 (Ch)

Statutes:

Income and Corporation Taxes Act 1988 103 106

Jurisdiction:

England and Wales

Citing:

At FTTTxShop Direct Group and Others v Revenue and Customs FTTTx 14-Feb-2012
FTTTx Corporation tax – receipts of payments in respect of overpaid VAT and statutory interest – whether VAT repayments trading receipts – whether payments in respect of supplies made in discontinued trades . .
Appeal fromShop Direct Group, Littlewoods Retail Ltd and Others v HMRC UTTC 19-Apr-2013
UTTC Corporation Tax: Effect of receipt by trader or successor to trade of sums in respect of VAT repaid under s80 VATA to representative member of VAT group plus interest paid under s78 VATA. Question of . .

Cited by:

Appeal fromShop Direct Group v Revenue and Customs CA 11-Mar-2014
The company sought to challenge the assessment to corporation tax of a very large repayment of VAT, together with an even larger amount of interest.
Held: The appeal failed. . .
At ChDShop Direct Group v Revenue and Customs SC 17-Feb-2016
The Court considered the interpretation of the sections which applied corporation tax to post-cessation receipts. Companies had received from the Inland Revenue substantial repayments of VAT together with interest. There had been reorganisations of . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 15 May 2022; Ref: scu.472829

Melluish (Inspector of Taxes) v BMI (No 3) Ltd and Related Appeals: HL 16 Oct 1995

Chattels which became affixed to a lessee’s land became fixtures, and were not available for tax allowances calculations. Lord Browne-Wilkinson said: ‘The terms expressly or implicitly agreed between the fixer of the chattel and the owner of the land cannot affect the determination of the question whether, in law, the chattel has become a fixture and therefore in law belongs to the owner of the soil . . The terms of such agreement will regulate the contractual rights to sever the chattel from the land as between the parties to that contract and, where an equitable right is conferred by the contract, as against certain third parties. But such agreement cannot prevent the chattel, once fixed, becoming in law part of the land and as such owned by the owner of the land so long as it remains fixed.’ and ‘the intention of the parties as to ownership of the chattel fixed to the land is only material so far as such intention can be presumed from the degree and object of the annexation.’

Judges:

Lord Browne-Wilkinson

Citations:

Gazette 08-Nov-1995, Times 16-Oct-1995, Ind Summary 06-Nov-1995, [1996] AC 454

Statutes:

Capital Allowances Act 1990 24(1) 53(1)

Jurisdiction:

England and Wales

Citing:

Appeal fromMelluish (Inspector of Taxes) v BMI (No 3) Ltd and Related Appeals CA 17-Aug-1994
Capital allowances were not available on plant which had been leased to the Local Authority and which had since had become part of land occupied by them. The plant was no longer owned by the tax payers. Leased fixtures given capital allowances by . .

Cited by:

CitedElitestone Ltd v Morris and Another HL 1-May-1997
The plaintiff acquired land on which 27 chalets were erected. They served notice to quit so that the site could be developed. The defendants argued that they had residential tenancies with protection under the Rent Act 1977.
Held: The tenants’ . .
CitedBotham and others v TSB Bank Plc CA 30-Jul-1996
A flat had been repossessed by the bank. The parties disputed whether items were fixtures and charged with the land or not.
Held: The judge had correctly analysed and applied the law of fixtures and fittings. The appeal failed save to a . .
CitedL, Regina (on the Application of) v Commissioner of Police for the Metropolis and Another CA 1-Mar-2007
The court considered the proper content of an enhanced criminal record certificate. The claimant said that it should contain only matter relating to actual or potential criminal activity.
Held: As to the meaning of section 115: ‘if Parliament . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax, Income Tax, Land

Updated: 15 May 2022; Ref: scu.83611

Vibroplant Ltd v Holland (HM Inspector of Taxes): CA 1980

The use of the buildings for servicing and repairing the plant which Vibroplant wished to hire out, was an essential part of Vibroplant’s business of plant hire operators and part of their trade. Although not required to decide the point, the court expressed a view as to whether the repair and servicing of the plant might constitute part of the business. He accepted that that activity might fall within the definition of ‘part of a trade’.

Judges:

Dillon J

Citations:

(1981) 54 TC 658, [1980] STC 671

Cited by:

CitedRevenue and Customs v Maco Door and Window Hardware (Uk) Ltd ChD 19-Jul-2006
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 . .
CitedMaco Door and Window Hardware (UK) Ltd v Revenue and Customs HL 30-Jul-2008
The House was asked whether a warehouse used to store purchases made by the company from its parent company in Austria, was an ‘industrial building or structure’. It was agreed that the facility was used for the storage of materials for use in later . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 14 May 2022; Ref: scu.244482

Sun Life Assurance Society v Davidson: CA 1956

The phrase ‘general management’ extended further than ‘management’ and included what was done at the lower levels of a company’s executive structure.
Romer LJ said: ‘The ratio decidendi of Golder’s Case (Capital and National Trust Ltd. v. Golder (H.M. Inspector of Taxes)) (1949) 31 TC 265, as it seems to me, was that the phrase ‘expenses of management’, as used in s. 33 of the Income Tax Act, 1918, means, in effect, the expenses of the managers of a company (who would normally be the board of directors) and not the expenses incurred by the company in the general management of its business ; in other words, the phrase is directed to the expenses involved in shaping policy and in other matters of managerial decision and does not extend to expenses subsequently and consequently incurred at lower levels of the company’s executive structure.’

Judges:

Romer LJ

Citations:

[1956] 1 Ch 524

Citing:

AppliedNorman v Golder (Inspector of Taxes) 1944
The court considered the nature of allowable expenses for an investment company: ‘the notion behind this Section may be thought to be that the expenditure is something which if you were looking at the profits and gains under Schedule D would be . .

Cited by:

Appeal fromSun Life Assurance Society v Davidson HL 4-Jul-1957
The court considered the question of what was meant by the phrase ‘expenses of management’
Held: The phrase (s75) could be seen ‘as apt to cover the expenses which would normally be deductible in respect of its life assurance business if an . .
CitedAtkinson (HM Inspector of Taxes) v Camas Plc CA 6-May-2004
An investment company made an abortive attempt to take over another. It sought to set off against its Corporation Tax, the costs of the professional advice incurred.
Held: The expenses were deductible. . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 13 May 2022; Ref: scu.198421

In re Mesco Properties Ltd: CA 1980

Tax legislation provided that the company was chargeable to corporation tax on a capital gain arising in the winding up.
Held: The appeal failed. It was a tax which the liquidator was bound to discharge by payment, and the payment was a ‘necessary disbursement’ for the purposes of the winding-up rules.

Judges:

Buckley LJ, Bridge LJ, Templeman LJ

Citations:

[1980] 1 WLR 96

Jurisdiction:

England and Wales

Citing:

Appeal fromIn re Mesco Properties Ltd ChD 1979
The court considered whether corporation tax had to be paid as an expense of the liquidation in priority to other claims. In that case it had arisen not on profits but on chargeable gains, on sales of the company’s properties after the commencement . .

Cited by:

CitedKahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc HL 20-Feb-2002
A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was . .
CitedIn re Nortel Companies and Others SC 24-Jul-2013
The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency.
Held: Liabilities which arose from financial support directions or contribution notices . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax, Insolvency

Updated: 12 May 2022; Ref: scu.190090

Craven (IOT) v White (Stephen); Inland Revenue Commissioners v Bowater Property Developments: HL 1989

In Craven, the taxpayers owned shares in Q Ltd. In early 1976 they began to negotiate with C Ltd for a merger of the two companies and steps were taken to establish an Isle of Man holding company to act as a vehicle for the taxpayers’ shares should the merger materialise. Later in that year the taxpayers were approached regarding the possibility of a sale of Q Ltd to J Ltd. The merger negotiations with C Ltd ceased during negotiations to sell Q Ltd. Later, amid fears that the sale to J Ltd would not materialise, those merger talks were resumed and M Ltd, an Isle of Man company, was incorporated. However, talks then started up again with J Ltd, and the taxpayers exchanged their shares in Q Ltd for shares in M Ltd. Following further negotiation, J Ltd purchased the shares in Q Ltd from M Ltd. The House considered what would amount to a pre-ordained series of transactions when considering their tax effect.
Held: (Lord Templeman and Lord Goff of Chieveley dissenting) in determining whether a number of transactions of which at least one (the intermediate transaction) had no purpose other than tax avoidance should be treated for fiscal purposes not as independent but as forming part of one composite linear transaction from which tax consequences flowed within the Ramsay principle, as extended by Furniss v Dawson, it had to be shown, for the principle to be applicable, that:
(1) the series of transactions in question was, at the time when the intermediate transaction was entered into, pre-ordained in order to produce a given result;
(2) the series of transactions had no purpose other than tax mitigation;
(3) there was at that time no practical likelihood that the pre-ordained events would not take place in the order ordained, so that the intermediate transaction was not even contemplated practically as having an independent life; and
(4) the pre-ordained events did in fact take place. On this basis, the majority held that the share exchange in Craven v White could not be disregarded and that the Crown’s appeal was dismissed.
Lord Oliver said: ‘Another identifying feature is that all the stages of what is claimed as the composite transaction are pre-ordained to take place in an orchestrated sequence and, in my opinion, that must mean more than simply ‘planned or thought out in advance’. It involves to my mind a degree of certainty and control over the end result at the time when the intermediate steps are taken. That does not, I think, mean absolute certainty in the sense that every single term of the transaction which ultimately takes place must then be finally settled and agreed. But it does seem to me to be essential at least that the principal terms should be agreed to the point at which it can be said that there is no practical likelihood that the transaction which actually takes place will not take place. Nor is it sufficient, in my opinion, that the ultimate transaction which finally takes place, though not envisaged at the intermediate stage as a concrete reality, is simply a transaction of the kind that is then envisaged, for the underlying basis of the Ramsay doctrine is that it must, on the facts, be possible to analyse the sequence as one single identifiable transaction and if, at the completion of the intermediate disposition, it is not even known to whom or upon what terms any ultimate disposition will be made, I simply do not see how such an analysis is intellectually possible. It is an essential part of the analysis that there is but one disposal and not two and that the transfer to the intermediate company is not a ‘disposal’ within the meaning of the statute.’

Judges:

Lord Keith of Kinkel, Lord Jauncey of Tullichettle, Lord Oliver of Aylmerton, Lord Templeman and Lord Goff of Chieveley

Citations:

[1989] AC 398, [1988] 3 All ER 495, [1988] 3 WLR 423

Jurisdiction:

England and Wales

Citing:

CitedW T Ramsay Ltd v Inland Revenue Commissioners HL 12-Mar-1981
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 . .

Cited by:

AppliedEnsign Tankers (Leasing) Ltd v Stokes (Inspector of Taxes) HL 6-May-1992
The appellants entered into partnerships with a film production company. By doing so they intended to make available to themselves first year allowances on the capital expenditure incurred. Loan agreements protected them from any eventual loss.
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 12 May 2022; Ref: scu.186341

Hoechst Finance Limited v Gumbrell: CA 1983

The issue was whether the appellant company, a member of an international group of trading companies, could recover as expenses of management a commission of 0.25% per annum it had to pay to its parent as the price of obtaining a guarantee for the issue of some guaranteed unsecured loan stock. The loan stock issue was made to raise finance for the other group companies operating within the United Kingdom.
Held: the commission was not an expense of management because it could not be severed from the cost of raising the finance. (Dillon LJ) ‘In the present case it seems to me that the guarantee had to be obtained by the company from its parent in order to raise the money to invest by advances to the other United Kingdom subsidiaries and the company had to agree to pay the parent the continuing commission in order to obtain the guarantee and therefore realistically as part of the price of raising the money. The commission cannot be severed from the cost of acquisition and so equally the annual payments of the commission cannot be severed from the cost of acquisition. It is unreal to regard each annual payment as merely a payment for the current year or the current six months to keep the guarantee on foot as part of the continuing management of the company’s business, because the whole obligation in respect of the loan stock and the obligation of the guarantee was undertaken once and for all when the stock was raised and the guarantee was entered into, and, as document 5 shows, the commission was charged by the parent company for giving the guarantee. It all relates back to the giving of the guarantee.’ (May LJ) ‘In my opinion, the result of that case is that in this type of situation one has to ask whether the relevant payment can be regarded as properly severable from the costs of acquisition of an investment or the issue of loan stock, on the one hand, or a direct and necessary part of the cost of a normal method of purchase or issue, on the other. If, posing that question, the answer is that it is the latter, then the payment is not an expense of management.’

Judges:

Dillon LJ, May LJ

Citations:

(1983) 56 TC 594

Citing:

CitedSun Life Assurance Society v Davidson HL 4-Jul-1957
The court considered the question of what was meant by the phrase ‘expenses of management’
Held: The phrase (s75) could be seen ‘as apt to cover the expenses which would normally be deductible in respect of its life assurance business if an . .

Cited by:

CitedCamas Plc v HM Inspector of Taxes ChD 7-Jul-2003
An investment company sought to set against its liability to corporation tax, the various costs of taking over another company. They argued that as an investment company these were not costs of the purchase and could be set against tax.
Held: . .
CitedAtkinson (HM Inspector of Taxes) v Camas Plc CA 6-May-2004
An investment company made an abortive attempt to take over another. It sought to set off against its Corporation Tax, the costs of the professional advice incurred.
Held: The expenses were deductible. . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 12 May 2022; Ref: scu.184473

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 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.’

Judges:

Park J

Citations:

Times 26-Aug-2002, Gazette 03-Oct-2002, [2002] EWHC Ch 1525, [2003] STC 66

Statutes:

Capital Allowances Act 1990 24(1)

Jurisdiction:

England and Wales

Citing:

CitedW T Ramsay Ltd v Inland Revenue Commissioners HL 12-Mar-1981
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 . .
CitedMcNiven (Inspector of Taxes) v Westmoreland Investments Ltd CA 26-Oct-1998
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 . .

Cited by:

Awaiting AppealBMBF (No 24) Limited v the Commissioners of Inland Revenue CA 6-Nov-2003
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 . .
Appeal fromBarclays Mercantile Business Finance Ltd v Mawson, HM Inspector of Taxes CA 13-Dec-2002
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 . .
At first instanceBarclays 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 . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax, Taxes Management

Updated: 12 May 2022; Ref: scu.174737

Regina v Inland Revenue Commissioners, Ex Parte Newfields Developments Ltd: CA 15 Feb 2000

The test in the section, provided the conclusive test to establish who had control of a company. The commissioners had no discretion as to how or when to apply the criteria. The first part listed several ways in which the identity and number of people with control was to be calculated, and the second limb was to be used to choose between them.

Citations:

Times 15-Feb-2000

Statutes:

Income and Corporation Taxes Act 1988 416 (6), 13

Jurisdiction:

England and Wales

Citing:

Appeal fromRegina v Commissioners of Inland Revenue ex parte Newfields Developments Limited Admn 17-Feb-1999
The power of the Inland Revenue to attribute to company members powers to control the company not given by their holdings, by associating them with other members is a limited one and is to be used only when the association is real.
Small . .

Cited by:

Appeal fromRegina v Inland Revenue Commissioners, ex parte Newfields Developments Ltd HL 21-Jun-2001
Tax relief for smaller companies was to be reduced where a person controlling the company was associated with other companies. The taxpayer was found to be in control of two companies by virtue of her associations with two trusts with control of two . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax, Company

Updated: 11 May 2022; Ref: scu.85324

In Re Toshoko Finance Uk Plc: CA 29 Mar 2000

Where a company in liquidation made profits which were to be taken into account for Corporation Tax even though they might never be realisable, the tax payable had priority over the claims of the creditors. In this case the prime asset of the company was a debt due from a connected company. It would not be paid, but the law deemed it to receive interest and that the interest was taxable.

Citations:

Times 29-Mar-2000, Gazette 14-Apr-2000

Statutes:

Income and Corporation Taxes Act 1988

Jurisdiction:

England and Wales

Corporation Tax, Insolvency, Company

Updated: 10 May 2022; Ref: scu.82253

Dunlop International Ag v Pardoe (Inspector of Taxes): CA 5 Oct 1999

Where a company ceased to be resident in the UK, and there was deemed as a result to be a transfer of shares between companies within the group, that transfer gave rise to a chargeable gain which was chargeable to Corporation Tax.

Citations:

Times 05-Oct-1999

Statutes:

Income and Corporation Taxes Act 1970, Taxation of Chargeable Gains Act 1992 178

Jurisdiction:

England and Wales

Corporation Tax, Capital Gains Tax

Updated: 10 May 2022; Ref: scu.80173

Bestway (Holdings) Ltd v Luff (Inspector of Taxes): ChD 4 Mar 1998

The taxpayer company operated a wholesale cash and carry business from a number of self-service supermarkets. The stores sold groceries, household goods, tobacco, confectionery and various kinds of alcohol. Although the buildings were not open to the public the customers who were mainly retail traders and caterers had access to most parts of the store except for a bonded warehouse and were able physically to remove the goods they wanted to buy from the shelves. The premises operated much like a retail supermarket. Goods were paid for at a checkout and most customers removed their purchases in their own transport. The company contended that its use of the stores fell within both s.7(1)(f) and s.7(1)(e) of the Capital Allowances Act 1968 as extended by s.7(2).
Held: The warehouse had been used as a wholesale cash and carry supermarket and was not an industrial building for capital allowance purposes. The term ‘storage’ in s.18(1)(f) (and by extension in s.18(2)) is to be given a very limited meaning. The court analysed what is meant by ‘a trade which consists in the storage’ of qualifying goods and materials by examining what he refers to as the statutory context of the phrase in terms of nine propositions: (3-8) ‘(3) A building may be in use for the purposes of a trade which qualifies it for allowances though it is in use at the same time (and indeed more intensively) for another non-qualifying trade. The use of a building for dual purposes, one qualifying and one not, may qualify the building for allowances so long as the use for the qualifying purpose is not small or insignificant and such that it could not reasonably be brought within the Act: see Saxone, Lilley and Skinner (Holdings) Ltd. v. Commissioners of Inland Revenue 44 TC 122, at 140 (‘Saxone’).
(4) A building in use for a purpose which does not of itself qualify it for allowances under s7(1)(e) or (f), may nonetheless qualify if the use is ancillary to a use which does qualify: see Sarsfield v. Dixons Group plc [1997] STC 283, at 298. Thus a building may be in use for the purposes of a trade consisting in a ‘mill, factory or other similar premises’ or of a trade carried on of the manufacture or processing of goods or materials, if the building is used for the storage of goods or raw materials to be used in, or of the product of, that trade.
(5) The conditions which s 7(1)(e) and (f) require to be complied with are strict: the use is to be of a building (and not a part or parts of a building) and the trade is to consist in (and not merely involve or include) the specified activity. The strictness in respect of both elements is, however, relaxed by subsequent provisions. Section 87(4) provides that a part of a building may constitute an industrial building if the statutory conditions are satisfied in respect of that part. Section 7(2) provides that, if part only of the trade carried on satisfies the statutory conditions, a building or part of a building in use for that part of the trade may qualify as an industrial building. I shall later in this judgment have to consider what constitutes a part of a trade.
(6) The extended ambit of s 7(1) (to which I have referred to in (4) above) and the relaxations (to which I have referred to in (5) above) are reflected in s 7(4). This subsection is designed to disqualify from entitlement to allowances buildings used for the purposes there specified (which include a showroom or shop). The draftsman recognised that it was necessary to spell out that the disqualification extended to buildings or parts of buildings used for any of these specified purposes or for any purpose ancillary to these purposes.
(7) Section 7(1)(f) in terms strictly limits use which qualifies thereunder for allowances to use for a trade which does not merely involve or include storage, but which consists in storage of the specified goods. Storage must be the (and not merely a) constituent of the trade. But s 7(2) relaxes this restriction and provides that, where storage is not the trade carried on, but is part of the trade carried on, a building or part of a building used for this purpose qualifies for the allowances.
(8) Whilst s 7(4) expressly disqualifies from entitlement to allowances a building or part of a building used for the trade of a retail shop or showroom (and accordingly a retail supermarket) and for storage ancillary to such use, it is common ground that (perhaps because they were not yet thought of in 1945) there is no such disqualification of a building or part of a building used for the trade of a wholesale supermarket or use ancillary to such trade. Accordingly if and so far as a building is in use for the purpose of storage of the specified goods and such use is part of the trade of a wholesale supermarket, by virtue of s 7(2) the building may attract the allowances.’
Lightman J concluded: ‘The authorities make clear that there may be ‘storage’ where
goods are kept or held for a limited period and indeed for shorter periods than the 6-8 week period during which Bestway’s goods are in the building. In Saxone the shoes were held to be stored in a warehouse though they remained there for 10-13 weeks or less. In Crusabridge Investments Ltd. v. Casings International Ltd. 54 TC 246 (‘Crusabridge’) a building was held to qualify: (a) under s 7(1)(f)(ii) because tyres were ‘stored’ though often for no more than 7 days awaiting removal for processing (i.e. remoulding) by remoulders; and (b) under s 7(1)(f)(iii) because the processed (i.e. remoulded) tyres still owned by the re-moulder were stored there pending delivery to a purchaser. But the length of time during which goods are kept or held can only be one, and not the decisive factor or the factor of first importance, in determining whether they are stored: the determining factor must be the purpose for which the goods are kept or held. If goods are delivered for safe keeping to a depository (e.g. a bank providing a safe deposit), so long as the goods remain in the possession of the depository they may be described, as ‘stored’; but this would not be the apt description of goods handed over in the course of his business to a repairer or pawnbroker.
In this case what is critical is the nature of the enterprise intended to be carried on and actually carried on by Bestway at the buildings and the role played by the stock in that enterprise. For a building is only used for storage if the purpose of keeping goods there is their storage as an end in itself: there is no such use for storage if the goods are kept there for some other purpose: consider Kay v. Burrows and Others [1931] AC 454. All the stock in the present case is kept in the buildings, not for storage, but for sale. No goods are reserved or withheld for future use: they are all likewise available for sale and intended to be sold as soon as the turnover allows. For practical reasons only part of the stock can be made physically available for self-service by customers; but that does not alter the fact that the back-up stock is intended to be made immediately available as soon as required to meet demand. In short, as it seems to me, ‘storage’ in s 7(1)(f) means keeping in storage as a purpose and end in itself, and does not extend to such storage as is merely a necessary and transitory incident of the conduct of the business of a wholesale supermarket. The goods enter the buildings upon their final journey to the customers. The 6-8 weeks of stock at any time in the buildings may be likened to stock on an extension to the open shelves or on a conveyor belt to the open shelves. Far from being kept in reserve, the stock is in the process or in the course of being made available to purchasers at the buildings.
It is submitted by Bestway that this conclusion is inconsistent with the decision in Crusabridge. The decision in Crusabridge may be explained on its own facts, namely that there was in that case a finding that the collection and storage of tyres was ‘an essential part’ of the business: see pages 248C-249G. But in any event I do not think that that decision should stand in the way of what is clearly the correct answer in this case.’

Judges:

Lightman J

Citations:

Times 04-Mar-1998, Gazette 01-Apr-1998, (1998) 70 TC 512, [1998] STC 357

Statutes:

Capital Allowances Act 1990 18

Jurisdiction:

England and Wales

Citing:

CitedKay v Burrows HL 1931
The House considered whether premises (the greater part of which was used for the storage of rags awaiting processing, sorting or subsequent despatch) fell within the proviso to s.3(1) which excluded premises ‘primarily occupied and used [for the] . .
CitedSaxone Lilley and Skinner (Holdings) Ltd v Commissioner of Inland Revenue HL 1967
The taxpayer company was the parent company of a group of subsidiaries, one of which traded as the manufacturer and retailer of shoes. The others either manufactured or sold shoes. The company built a warehouse which was let to a warehousing . .

Cited by:

CitedRevenue and Customs v Maco Door and Window Hardware (Uk) Ltd ChD 19-Jul-2006
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 . .
CitedMaco Door and Window Hardware (UK) Ltd v Revenue and Customs HL 30-Jul-2008
The House was asked whether a warehouse used to store purchases made by the company from its parent company in Austria, was an ‘industrial building or structure’. It was agreed that the facility was used for the storage of materials for use in later . .
CitedIceland Foods Ltd v Berry (Valuation Officer) SC 7-Mar-2018
Air System plant excluded from Rating value
The court was asked whether the services provided by a specialised air handling system, used in connection with refrigerated merchandise in the appellant’s retail store, are ‘manufacturing operations or trade processes’ for rating purposes.
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 10 May 2022; Ref: scu.78370

Commissioner of Inland Revenue v Secan Ltd: 2000

(Court of Final Appeal, Hong Kong) The taxpayer company borrowed money to buy some land and build a block of flats. Construction took three years, during which no sales took place. The company’s accounts submitted to the revenue for those years treated interest on the borrowed money as carried forward to be added to the cost of the flats and, there being no sales against which any costs could be set off, showed neither a profit nor a loss. The company then changed its mind and claimed that its accounts had been drawn up on a false basis. Section 16 of the Hong Kong Inland Revenue Ordinance provides that in ascertaining the assessable profits for any year of assessment, ‘there shall be deducted all outgoings and expenses to the extent to which they are incurred during the basis period for that year of assessment . . including . . interest.’ The taxpayer argued that the carrying forward of any outgoings and expenses is prohibited and all such outgoings should have been deducted in the year in which they were incurred. The claim was to rewrite the accounts to show that the interest payments gave rise to a substantial loss in each year.
Held: Section 16 did not prohibit the capitalisation of interest, but there had been a deduction for interest in each of the first three years but that it had been set off against an increase in the value of the stock. The fact that the profit and loss account showed neither of these items was ‘merely a matter of presentation’.

Judges:

Miller LJ

Citations:

(2000) 74 TC 1

Cited by:

CitedRevenue and Customs v William Grant and Sons Distillers Ltd HL 28-Mar-2007
The Revenue appealed findings as to the calculation of profits for corporation tax. The companies had sought to deduct sums from profits for depreciation of unsold stock in accordance with current accounting standards.
Held: ‘the profit and . .
Lists of cited by and citing cases may be incomplete.

Commonwealth, Corporation Tax

Updated: 10 May 2022; Ref: scu.251452

Dale (HM Inspector of Taxes) v Johnson Brothers: 1951

(Year?) The taxpayer claimed an industrial buildings allowance against his tax liabilities for a warehouse used as storage as a trade in itself. Two thirds of the use was for storage of finished goods awaiting collection or delivery. The taxpayers were the sole selling agents for various manufacturers and were obliged under the agreement with them to store sufficient products to enable prompt delivery to be made to customers. They relied on s.8(1)(d)(iii) of the 1945 Act.
Held: The claim was rejected. The trade carried on at the warehouse was not storage alone, but also the disposal of the goods as selling agents.
Sheil J said: ‘That Section, so far as it is invoked here, contemplates that the use of the building must be for a trade and that trade, so far as the use is concerned, must be a storage trade. It will not do that the trade is storage plus something else or something else plus storage. It must be simply a keeping or custody. When one considers the use of the two-thirds of this building it cannot be said that there was simply a keeping or custody in that part of it. The agreements required a constant active movement of the goods by the Respondents, a disposal of them by the Respondents ‘

Judges:

Sheil J

Citations:

(1951) 32 TC 487

Statutes:

Income Tax Act 1945 8

Cited by:

CitedRevenue and Customs v Maco Door and Window Hardware (Uk) Ltd ChD 19-Jul-2006
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 . .
ExplainedCrusabridge Investments Ltd v Casings International Limited 1979
The landlord of light industrial premises sought damages from his tenant for breach of the user covenant in the lease. This permitted the premises to be used, inter alia, as an ‘industrial building or structure’ as defined by the Capital Allowances . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 10 May 2022; Ref: scu.244452

Land Management Ltd v Fox: SCIT 2002

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.’

Judges:

Dr N Brice

Citations:

[2002] STC (SCD) 152

Cited by:

CitedHM Revenue and Customs v Salaried Persons Postal Loans Ltd ChD 7-Apr-2006
The company had ceased trading, but rental income was still generated from its former premises. The Revenue sought to include the receipt in calculations of whether the company was entitled to a small company corporation tax rate. The Revenue . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 10 May 2022; Ref: scu.242604

Lord Advocate v R W Forsyth Ltd: 1986

The taxpayer appealed his corporation tax assessments and had applied to a special commissioner for postponement of payment. The applications was to be heard in Glasgow, but for convenience it was heard in London, where it failed. The taxpayer then asked the High Court for judicial review of the postponment decisions. At the same time, the Crown had issued summonses in the Court of Session seeking payment of the tax due.
Held: The court granted a decree in favour of the Crown in both proceedings. The High Court had no jurisdiction in the matter. The decision of the special commissioner on a Scottish tax case, although sitting for administrative convenience in London, remained subject to the supervisory jurisdiction of the Scottish court. Confusion could result if more than one court had jurisdiction.

Judges:

Lord Wylie

Citations:

(1986) 61 TC 1

Jurisdiction:

Scotland

Cited by:

CitedTehrani v Secretary of State for the Home Department HL 18-Oct-2006
The House was asked whether an asylum applicant whose original application was determined in Scotland, but his application for leave to appeal rejected in London, should apply to challenge those decisions in London or in Scotland.
Held: Such . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax, Scotland, Jurisdiction

Updated: 09 May 2022; Ref: scu.245384

Watson Brothers v Hornby: 1942

Citations:

(1942) 24 TC 506

Cited by:

ApprovedSharkey v Wernher HL 1955
Where a trader takes stock from his business for private use or for use in another business which he owns, or where he transfers to his business stock which he owns in some other capacity than that of proprietor of that business, the transfer should . .
CitedMaco Door and Window Hardware (UK) Ltd v Revenue and Customs HL 30-Jul-2008
The House was asked whether a warehouse used to store purchases made by the company from its parent company in Austria, was an ‘industrial building or structure’. It was agreed that the facility was used for the storage of materials for use in later . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 07 May 2022; Ref: scu.276208

London and Thames Haven Oil Wharves Ltd v Attwooll: CA 1966

When asking whether a payment of damages was a capital or income receipt, the court should ask whether the sum which the trader ought to have received have been credited as an income receipt of the trade?

Judges:

Diplock LJ

Citations:

[1966] 43 TC 491

Jurisdiction:

England and Wales

Cited by:

CitedAble (UK) Ltd v Revenue and Customs CA 22-Nov-2007
The taxpayer company had received compensation for having been excluded from its business premises for a period until a compulsory purchase process failed. It treated the receipt as capital. The revenue said it was income.
Held: The court . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 07 May 2022; Ref: scu.261558

HM Revenue and Customs v Vodafone 2: ChD 2006

The revenue had sought an order for disclosure of documents relating to the income of wholly controlled subsidiaries. There was no difference between the case where a question of Community law arose on which a preliminary ruling by the ECJ was required and any other point of law. In either case it was not enough that the Revenue considered that the law was as they contended it to be.
Held: ‘If the reasonableness of the grounds for not issuing a closure notice depends on a question of law which the Commissioners can decide, surely the right course is for them to decide it. Or at the every least it must be open to them to decide it.’ There was no reason why the commissioners should not be able to decide a point of law on a schedule 33 application. The commissioners had been correct to say that the inspector should seek a ruling from the ECJ.

Judges:

Park J

Citations:

[2006] STC 483

Jurisdiction:

England and Wales

Citing:

Appeal fromVodafone v Revenue and Customs SCIT 24-May-2005
. .

Cited by:

Appeal fromHM Revenue and Customs v Vodafone 2 CA 28-Jul-2006
The inspector had sought additional information from the company with respect to its tax returns, believing that the company had not provided sufficient information about the earnings of foreign controlled companies. They now challenged the ability . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax, Taxes Management, European

Updated: 07 May 2022; Ref: scu.244206

Thompson (Inspector of Taxes) v Hart: ChD 24 Apr 2000

The system of tax relief called the business expansion scheme did not apply when land was given in exchange for shares in the qualifying company. The scheme gave relief for efforts in raising money. That could not be satisfied by property given in money’s worth.

Citations:

Times 24-Apr-2000

Statutes:

Income and Corporation Taxes Act 1988 289

Jurisdiction:

England and Wales

Income Tax, Corporation Tax

Updated: 05 May 2022; Ref: scu.89871

Sarsfield (Inspector of Taxes) v Dixons Group Plc and Related Appeals: CA 20 Jul 1998

Warehouse used purely for distribution of goods for retailer did not qualify for initial or writing down allowances since the use, although industrial, was not ancillary to the use as a retail shop.

Citations:

Times 20-Jul-1998

Statutes:

Capital Allowances Act 1968 1 and 2

Jurisdiction:

England and Wales

Corporation Tax

Updated: 05 May 2022; Ref: scu.89018

Bibby (Inspector of Taxes) v Prudential Assurance Co Ltd; Oakes (Inspector of Taxes) v Equitable Life Assurance Society: ChD 17 May 2000

A life insurance company which sold its ‘own purchase shares’ was not prevented by the section from reclaiming the tax credits on associated income distributions.

Citations:

Times 17-May-2000, Gazette 31-May-2000

Statutes:

Income and Corporation Taxes Act 1988 95 438(4)

Jurisdiction:

England and Wales

Citing:

See AlsoPrudential Assurance Company Ltd v Bibby (Inspector of Taxes) ChD 24-Jul-1999
Charges on income are not first to be deducted before computing relevant profits of a company carrying on life assurance business under the Act. This allows such companies to set such charges against the balance of profits chargeable to corporation . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 05 May 2022; Ref: scu.78388

Test Claimants In The Franked Investment Income Group Litigation and Others v Revenue and Customs: SC 20 Nov 2020

Judges:

Lord Reed, President, Lord Hodge, Deputy President, Lord Carnwath, Lord Lloyd-Jones, Lord Briggs, Lord Sales, Lord Hamblen

Citations:

[2020] UKSC 47

Links:

Bailii, Bailii Press Sumary, Bailii Issues and Facts

Jurisdiction:

England and Wales

Corporation Tax, European, Limitation

Updated: 04 May 2022; Ref: scu.656386

Cull v Commissioners of Inland Revenue: HL 1940

Lord Atkin said: ‘My Lords, it is now clearly established that in the case of a limited company the company itself is chargeable to tax on its profits, and that it pays tax in discharge of its own liability and not as agent for its shareholders. The latter are not chargeable with income tax on dividends, and they are not assessed in respect of them. The reason presumably is that the amount which is available to be distributed as dividend has already been diminished by tax on the company, and that it is thought inequitable to charge it again.’
Lord Wright said: ‘the shareholder is not taxed under Schedule D in respect of that part of his income which consists of dividends. The profits have been charged to tax in the hands of the company and that fact is deemed to redound to his benefit.’

Judges:

Lord Atkin, Lord Wright

Citations:

[1940] AC 51

Jurisdiction:

England and Wales

Income Tax, Corporation Tax

Updated: 04 May 2022; Ref: scu.573166

Floor v Davis (Inspector of Taxes): CA 1979

The court considered the taxation of a sale of shares in one company called IDM to a company (FNW) and a further sale by that company to a yat another company (KDI). Held(Majority) It was right to look at each of the sales separately. The court rejected an argument by the Crown that they could be considered as an integrated transaction.
Eveleigh LJ, dissenting, upheld the argument, saying that the fact that each sale was genuine did not prevent him from regarding each as part of a whole, or oblige him to consider each step in isolation. Nor was he so prevented by the Westminster case. Looking at the scheme as a whole, and finding that the taxpayer and his sons-in-law had complete control of the IDM shares until they reached KDI, he was entitled to find that there was a disposal to KDI.

Judges:

Eveleigh LJ

Citations:

[1978] Ch. 295

Cited by:

Appeal fromFloor v Davis (Inspector of Taxes) HL 1979
The House considered whether the meaning of the phrase ‘a person having control’ extended to control by more than one person. This depended on whether the word ‘person’ in the singular was to be construed as including the plural.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 04 May 2022; Ref: scu.449980

Odeon Associated Theatres Ltd v Jones: 1970

The court gave the formulation for the method of computing profits for corporation tax: ‘For the purposes of Case I or II of Schedule D the profits of a trade, profession or vocation must be computed on an accounting basis which gives a true and fair view, subject to any adjustment required or authorised by law in computing profits for those purposes.’ The court rejected the argument that accounts must comply with fundamental principles of accounting additional to the best practice of accountants as embodied in the accounting standards as ‘entirely novel’.

Judges:

Sir John Pennycuick V-C

Citations:

(1970) 48 TC 257

Cited by:

CitedRevenue and Customs v William Grant and Sons Distillers Ltd HL 28-Mar-2007
The Revenue appealed findings as to the calculation of profits for corporation tax. The companies had sought to deduct sums from profits for depreciation of unsold stock in accordance with current accounting standards.
Held: ‘the profit and . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 01 May 2022; Ref: scu.251430

Rolls Royce Motors Ltd v Bamford: 1976

The court was asked whether the new state owned company which took over some of the assets and undertaking of Rolls Royce Ltd following its insolvency was entitled to carry forward and set against its profits the losses of the old company up to the date of its liquidation. Rolls Royce Ltd had been made up of six divisions each making different types of engines. Four of the divisions which dealt with the manufacture of aero engines were transferred to the new state owned company while the two remaining divisions which manufactured cars were transferred to a new and separate company.
Held: The state owned company did not carry on the same trade as Rolls Royce Ltd had done because it no longer manufactured cars.

Judges:

Walton J

Citations:

(1976) 51 TC 319

Cited by:

CitedRevenue and Customs v Maco Door and Window Hardware (Uk) Ltd ChD 19-Jul-2006
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 . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 01 May 2022; Ref: scu.244481

Crusabridge Investments Ltd v Casings International Limited: 1979

The landlord of light industrial premises sought damages from his tenant for breach of the user covenant in the lease. This permitted the premises to be used, inter alia, as an ‘industrial building or structure’ as defined by the Capital Allowances Act 1968. The tenant was in business of purchasing used tyres, storing and inspecting them in the premises to see whether they were suitable for making re-moulds. Those thought to be suitable were then consigned to a re-moulder which would then select and purchase the tyres it wanted. The tenant also sold re-moulded tyres on commission and provided a re-moulding service for some of its customers. Due to the nature of its business, at any one time there would be a large number of tyres stored in the premises awaiting despatch to a re-moulder.
Held: The storage of used tyre casings and re-moulds fell within s.7(1)(f)(ii) and (iii) of the 1968 Act. As to Dale -v-Johnson, the true ratio of that decision was that the storage in that case was no more than ancillary to the company’s trade and that Shiel J did not decide that s.7(1)(f) was only applicable if ‘there is a trade which consists in storage and nothing else’. The words ‘which consists in’ in s.7(1)(f) means he said ‘involves’ .

Judges:

HH Judge Finlay QC

Citations:

(1979) 54 TC 246

Statutes:

Capital Allowances Act 1968

Citing:

ExplainedDale (HM Inspector of Taxes) v Johnson Brothers 1951
(Year?) The taxpayer claimed an industrial buildings allowance against his tax liabilities for a warehouse used as storage as a trade in itself. Two thirds of the use was for storage of finished goods awaiting collection or delivery. The taxpayers . .

Cited by:

Wrongly DecidedRevenue and Customs v Maco Door and Window Hardware (Uk) Ltd ChD 19-Jul-2006
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 . .
Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Corporation Tax

Updated: 01 May 2022; Ref: scu.244454

John M Harris (Design Partnership) Ltd v Lee: SCIT 1997

Mr Harris, an architect, owned more than 75% of the taxpayer company. He also owned all the shares in John M Harris (Properties) Ltd. He wanted to buy a holiday home in France and was advised that the property should, for French legal reasons and especially because of the laws of inheritance, be owned by a limited company, and he decided that it should be held by Properties Ltd. It was used exclusively by Mr Harris and his family, and was never let.
Held: Properties Ltd should be disregarded for the purposes of calculating relief pursuant to section 13(4) since it had not carried on any trade or business at the relevant time. Although the main object of Properties Ltd in its Memorandum of Association was that of an investment company, it did not follow that it had carried on that business when it acquired any property. Although a company might be carrying on a business of investment even though its investments were such as to provide no income, that did not mean that a company had to be carrying on a business merely because it owned property.

Judges:

D A Shirley

Citations:

[1997] STC (SCD) 240

Jurisdiction:

England and Wales

Citing:

AppliedAmerican Leaf Blending Co SDN BHD v Director-General of Inland Revenue PC 1979
(Malaysia) The taxpayer company had a cigarette making factory and a bonded warehouse for storing tobacco and cigarettes. Its business proved to be unprofitable, and it came to abandon both its manufacturing and trading businesses. It still owned . .

Cited by:

CitedHM Revenue and Customs v Salaried Persons Postal Loans Ltd ChD 7-Apr-2006
The company had ceased trading, but rental income was still generated from its former premises. The Revenue sought to include the receipt in calculations of whether the company was entitled to a small company corporation tax rate. The Revenue . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 01 May 2022; Ref: scu.242603

Carr v Sayer: 1992

The taxpayer claimed capital allowances for expenditure on purpose built permanent quarantine kennels.
Held: It was not expenditure on plant. To decide whether a structure is plant so as to qualify for capiltal allowances, the question is whether the item can reasonably be called apparatus with which the trade is carried on, as opposed to the premises in or on which it is carried on.

Judges:

Sir Donald Nicholls VC

Citations:

(1992) 65 TC 15

Cited by:

CitedLingfield Park (1991) Limited v Shove CA 31-Mar-2004
The taxpayers sought capital allowances on the costs of installing an artificial all-weather race track.
Held: The track was not either plant or machinery, and the taxpayer was not eligible for the relief. The only reasonable conclusion was . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 29 April 2022; Ref: scu.195998

Cooke v Beach Station Caravans Ltd: 1974

The excavation and construction of 2 swimming pools in a caravan park was held to be the provision of plant, not premises or setting.

Citations:

[1974] 1 WLR 1398, (1974) 49 TC 514

Jurisdiction:

England and Wales

Cited by:

CitedShove (Inspector of Taxes) v Lingfield Park 1991 Ltd ChD 21-Jul-2003
The taxpayer, a race track owner, sought to claim the cost of laying an artificial all-weather race track surface as a capital allowance. The commissioners had found that it retained a separate identity from the grass, requiring maintenance and so . .
CitedLingfield Park (1991) Limited v Shove CA 31-Mar-2004
The taxpayers sought capital allowances on the costs of installing an artificial all-weather race track.
Held: The track was not either plant or machinery, and the taxpayer was not eligible for the relief. The only reasonable conclusion was . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 29 April 2022; Ref: scu.185848

Inland Revenue Commissioners v Barclay Curle and Co Ltd: 1969

Even a large structure used for the purposes of the trade may be capable of being plant. In this case a dry dock was used in trade of ship builders, ship repairers and marine engineers.

Citations:

[1969] 1 WLR 675

Jurisdiction:

England and Wales

Cited by:

CitedShove (Inspector of Taxes) v Lingfield Park 1991 Ltd ChD 21-Jul-2003
The taxpayer, a race track owner, sought to claim the cost of laying an artificial all-weather race track surface as a capital allowance. The commissioners had found that it retained a separate identity from the grass, requiring maintenance and so . .
CitedGray (Inspector of Taxes) v Seymours Garden Centre (Horticulture) CA 31-May-1995
A ‘Planteria’ for the growing and storage of plants pending sale was premises, or a building, and not plant; no allowance was available. In considering the appeal, ‘the question for this Court, as it was for the Judge, is whether the facts found by . .
CitedLingfield Park (1991) Limited v Shove CA 31-Mar-2004
The taxpayers sought capital allowances on the costs of installing an artificial all-weather race track.
Held: The track was not either plant or machinery, and the taxpayer was not eligible for the relief. The only reasonable conclusion was . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 29 April 2022; Ref: scu.185850

Shove (Inspector of Taxes) v Lingfield Park 1991 Ltd: ChD 21 Jul 2003

The taxpayer, a race track owner, sought to claim the cost of laying an artificial all-weather race track surface as a capital allowance. The commissioners had found that it retained a separate identity from the grass, requiring maintenance and so forth, and that therefore it was plant, not premises. The revenue appealed.
Held: The commissioners had failed to ask whether it formed part of the premises from which the company conducted its business. Without doing violence to the language, it could not be seen otherwise. It might be separately identifiable, but that did not change its character. This was not a question of fact and degree so as to bind the court to the commissioners decision, but of the meaning of the word premises as exemplified in the authorities.

Judges:

Hart J

Citations:

Times 11-Aug-2003, Gazette 18-Sep-2003

Statutes:

Capital Allowances Act 1990 24

Jurisdiction:

England and Wales

Citing:

CitedInland Revenue Commissioners v Barclay Curle and Co Ltd 1969
Even a large structure used for the purposes of the trade may be capable of being plant. In this case a dry dock was used in trade of ship builders, ship repairers and marine engineers. . .
CitedCooke v Beach Station Caravans Ltd 1974
The excavation and construction of 2 swimming pools in a caravan park was held to be the provision of plant, not premises or setting. . .
CitedInland Revenue Commissioners v Scottish and Newcastle Breweries Ltd HL 4-Mar-1982
Expenditure on refurbishment, decor and fittings in hotels was held to be plant though forming part of the setting of the hotels. The House considered the interpretation of undefined expressions in fiscal legislation, such as ‘trade’, ‘income’, . .
CitedWimpy International Ltd v Warland 1988
Expenditure on modernising restaurants with shop fronts, floor and wall tiles, wall finishes, suspended ceilings, raised floors, fire doors and fire proofings was held not to be plant. The court asked what marks indicate that a structure premises of . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 29 April 2022; Ref: scu.185846

Overseas Containers (Finance Ltd) v Stoker: 1989

A transaction must be looked at as a whole in order to establish whether it was a genuine trading transaction eligible for tax relief, or was an action engendered solely by fiscal motives.

Citations:

[1989] 1 WLR 606

Jurisdiction:

England and Wales

Cited by:

CitedNew Angel Court Ltd v Adam (Inspector of Taxes) ChD 25-Jul-2003
The taxpayer company employed a subsidiary company through which it conducted its trade in land. It then sought to represent the profits from that subsidiary within its own accounts as trading profits for corporation tax purposes. The commissioner . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 29 April 2022; Ref: scu.185843

Wimpy International Ltd v Warland: 1988

Expenditure on modernising restaurants with shop fronts, floor and wall tiles, wall finishes, suspended ceilings, raised floors, fire doors and fire proofings was held not to be plant. The court asked what marks indicate that a structure premises of plant, for capital allowances purposes: ‘It is proper to consider the function of the item in dispute. But the question is what does it function as? If it functions as part of the premises it is not plant.’

Judges:

Hoffmann J, Fox LJ, Lloyd LJ

Citations:

[1988] SDTC 149, (1988) 61 TC 51

Jurisdiction:

England and Wales

Cited by:

CitedShove (Inspector of Taxes) v Lingfield Park 1991 Ltd ChD 21-Jul-2003
The taxpayer, a race track owner, sought to claim the cost of laying an artificial all-weather race track surface as a capital allowance. The commissioners had found that it retained a separate identity from the grass, requiring maintenance and so . .
CitedLingfield Park (1991) Limited v Shove CA 31-Mar-2004
The taxpayers sought capital allowances on the costs of installing an artificial all-weather race track.
Held: The track was not either plant or machinery, and the taxpayer was not eligible for the relief. The only reasonable conclusion was . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 29 April 2022; Ref: scu.185847

Coates v Arndale Properties Ltd: 1984

A transaction might be so clearly inspired by fiscal considerations that its shape and character as a trading transaction would be insufficient to preserve its tax value as such.

Citations:

[1984] 1 WLR 1328

Jurisdiction:

England and Wales

Cited by:

CitedNew Angel Court Ltd v Adam (Inspector of Taxes) ChD 25-Jul-2003
The taxpayer company employed a subsidiary company through which it conducted its trade in land. It then sought to represent the profits from that subsidiary within its own accounts as trading profits for corporation tax purposes. The commissioner . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 29 April 2022; Ref: scu.185842

Gas Lighting Improvement Co Ltd v Inland Revenue: HL 11 May 1923

Excess Profits Duty-Computation of capital-Investments made by company in other companies for the purposes of its trade-Finance (No. 2) Act, 1915 (5 A 6 Geo. V, c. 89), Sections 40 and 41, and Fourth Schedule, Part I, Rule 8, and Part III, Rule 2.

Citations:

[1923] UKHL TC – 12 – 503, [1923] AC 723

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 27 April 2022; Ref: scu.633260

Strathedin Properties Ltd and Another v Revenue and Customs: FTTTx 5 Jun 2018

Income Tax/Corporation Tax : Profits – connected parties – sale of property below market value – assessments appealed – valuation being the only ground of appeal – matter referred to Lands Tribunal – agreement on valuation before hearing – whether Consent Order on valuation can be characterised as a s 54 TMA agreement; yes – (a) common intention to reach agreement over a particular matter; (b) agreement in relation to the assessments under appeal; (c) agreement competent to fix quantum of assessments and to dispose of substantive matter under appeal – settlement of appeals ensued within the statutory context of – ‘like consequences’ – A’s application to amend grounds of appeal refused

Citations:

[2018] UKFTT 293 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 25 April 2022; Ref: scu.619364

United States v Apple Sales International and Others: ECJ 17 May 2018

State Aid – Aid Implemented By Ireland In Favour of Apple – Order – Appeal – Intervention – Third country – State aid – Aid implemented by Ireland in favour of Apple – Advance tax agreement (tax ruling) – Selective tax advantages – Action for annulment – Interest in the result of the case

Citations:

ECLI:EU:C:2018:330, [2018] EUECJ C-12/18P-I – CO

Links:

Bailii

Jurisdiction:

European

Commercial, Corporation Tax

Updated: 22 April 2022; Ref: scu.616985

Uppercut Films Ltd v Revenue and Customs: FTTTx 23 Apr 2018

Income Tax/Corporation Tax : Other – CORPORATION TAX – appeal against paragraph 1 Schedule 36 information notice – whether burden of proof on HMRC – whether documents reasonably required for the purpose of checking the appellant’s tax position – appeal dismissed

Citations:

[2018] UKFTT 232 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 14 April 2022; Ref: scu.609291

Reed v Nova Securities Ltd: 1985

In order to convert an allowable loss into a trading loss to secure a tax advantage, it was only necessary that there had to have been an acquisition by a trading company ‘as trading stock’

Citations:

[1985] 1 WLR 193

Jurisdiction:

England and Wales

Cited by:

CitedNew Angel Court Ltd v Adam (Inspector of Taxes) ChD 25-Jul-2003
The taxpayer company employed a subsidiary company through which it conducted its trade in land. It then sought to represent the profits from that subsidiary within its own accounts as trading profits for corporation tax purposes. The commissioner . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 12 April 2022; Ref: scu.185840

Regina v Inland Revenue Commissioners Ex Parte Banque Internationale a Luxembourg Sa: Admn 23 Jun 2000

The commissioners obtained court orders directing the applicant bank to disclose confidential information in their possession. The bank resisted on the ground that the demand breached their rights to confidentiality and to privacy. Although the orders did infringe the Bank’s article 8 rights, the notices were valid because the interference was justified under article 8(2). The notices were served in accordance with law, and were justified in pursuit of a legitimate aim and necessary in a democratic system for protecting the taxation system.

Citations:

Gazette 06-Jul-2000, [2000] EWHC Admin 360

Links:

Bailii

Statutes:

European Convention on Human Rights 8, Taxes Management Act 1970, Income and Corporation Taxes Act 1988

Jurisdiction:

England and Wales

Corporation Tax, Human Rights, Banking

Updated: 12 April 2022; Ref: scu.140175

Strand Futures and Options Ltd v Vojak (Inspector of Taxes): ChD 7 Feb 2003

The taxpayer had acquire by allotment a proportion of the issued share capital of a company and later sold half back. The respondent sought to bring in to the tax return the associated receipts.
Held: The effect of section 208 was to exclude from Corporation Tax all distributions of a UK company, save those otherwise expressly provided for. The effect of the repurchase was the cancellation of the shares. For tax on chargeable gains, the word ‘disposal’ must bear its ordinary meaning (Berry). The contract was a sale of shares. Notwithstanding that upon completion the shares would be cancelled, the share sale did not give rise to a liability for Corporation Tax in respect of any capital gain realised by virtue of section 208.

Judges:

The Honourable Mr Justice Etherton

Citations:

Times 25-Feb-2003, [2003] EWHC 67 (Ch), [2003] BTC 344, [2003] STI 204, [2003] STC 331

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988 208

Jurisdiction:

England and Wales

Corporation Tax

Updated: 11 April 2022; Ref: scu.179791

Willson v Hooker (Inspector of Taxes): ChD 21 Nov 1995

A single transaction carried out as an agent for a non-resident company can be the ‘carrying on’ of a regular agency, though acting independently, and instructing lawyers and agents to sell land.

Citations:

Times 21-Nov-1995, Ind Summary 04-Dec-1995

Statutes:

Taxes Management Act 1970 78(1), 82(1)

Jurisdiction:

England and Wales

Corporation Tax, Taxes Management

Updated: 10 April 2022; Ref: scu.90544

Sheppard and Another v Inland Revenue Commissioners, Inland Revenue Commissioners v Sheppard: Chd 23 Feb 1993

A Charity Tax avoidance plan was lawful. A company made payments to a charity which then employed them as charity trustees. Since the result was clearly to benefit the charity, and its purposes. The obtaining of a relief from tax, and the making use of an exemption are different for this purpose. The claiming of a tax credit is not a claiming of a relief.

Citations:

Ind Summary 05-Apr-1993, Times 23-Feb-1993, Gazette 07-Apr-1993

Statutes:

Income and Corporation Taxes Act 1988 703 709, Income and Corporation Taxes Act 1970 460(3)

Charity, Corporation Tax

Updated: 10 April 2022; Ref: scu.89221

Attwood (Inspector of Taxes) v Anduff Car Wash Ltd: ChD 11 Dec 1995

No capital allowances for car wash structures. They were part of premises, not plant.

Judges:

Carnwath J

Citations:

Times 11-Dec-1995

Statutes:

Capital Allowances Act 1990 22 24

Jurisdiction:

England and Wales

Cited by:

Appeal fromH M Inspector of Taxes (Atwood) v Anduff Car Wash Limited CA 17-Jul-1997
Capital allowances.
The taxpayer operated automatic car wash sites. It claimed capital allowances for the entirety of a wash hall, housed within a building incorporating washing machinery and control equipment, and surrounded by tarmac areas . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 10 April 2022; Ref: scu.78021

Regina v Inland Revenue Commissioners Ex Parte Banque Internationale A Luxembourg Sa: QBD 27 Jul 2000

The commissioners obtained court orders directing the applicant bank to disclose confidential information in their possession. The bank resisted on the ground that the demand breached their rights to confidentiality and to privacy. Although the orders did infringe the Bank’s article 8 rights, the notices were valid because the interference was justified under article 8(2). The notices were served in accordance with law, and were justified in pursuit of a legitimate aim and necessary in a democratic system for protecting the taxation system.

Citations:

Times 27-Jul-2000

Statutes:

European Convention on Human Rights 8, Taxes Management Act 1970, Income and Corporation Taxes Act 1988

Corporation Tax, Human Rights

Updated: 09 April 2022; Ref: scu.85321

Nuclear Electric Plc v Bradley (Inspector of Taxes): HL 29 Mar 1996

The income from investments set aside to cover future liabilities was not trading income.

Citations:

Gazette 09-May-1996, Times 29-Mar-1996

Statutes:

Income and Corporation Taxes Act 1988 393(8)

Citing:

Appeal fromNuclear Electric Plc v Bradley (Inspector of Taxes) CA 13-Nov-1995
Income on funds set aside but not allocated for expenditure not trading income . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 09 April 2022; Ref: scu.84383

Manufacturers Life Assurance Company v Cummins (Inspector of Taxes): ChD 22 Nov 2000

The tax exemption attracted to interest on some government securities in favour of foreign residents was lost by a foreign resident company when it carried on a long term life assurance business here on a mutual basis through an office here. The interest was taxable under Schedule C. The business profits restriction in the Act was the income minus expenditure basis. The business described was a trade.

Citations:

Times 22-Nov-2000

Statutes:

Finance Act 1940 60

Corporation Tax

Updated: 09 April 2022; Ref: scu.83390

Inland Revenue Commissioners v Laird Group Plc: ChD 13 Mar 2001

It was difficult to reconcile different decisions of the higher courts. Nevertheless, the declaration and payment of a dividend which did not involve any transaction in securities, or alteration of rights attaching to securities, was not itself a dealing in securities. The arrangement involved the declaration of abnormally large dividends in purchasing another company so as to create franked income which it could then set off against its own liability to tax at tax rates applicable to its group. If a payment operated to extinguish a security, it might become such a transaction, but in this case it had not.

Citations:

Times 13-Mar-2001, Gazette 20-Apr-2001

Statutes:

Income and Corporation Taxes Act 1988 706

Taxes Management, Corporation Tax

Updated: 08 April 2022; Ref: scu.82347

Girobank Plc v Clarke (Inspector of Taxes): ChD 21 Mar 1996

The part use of an industrial building as an office defeats a capital allowance claim.

Citations:

Gazette 01-May-1996, Times 21-Mar-1996

Statutes:

Capital Allowances Act 1990 18

Citing:

Appealed toGirobank Plc v Clarke (HM Inspector of Taxes) CA 19-Dec-1997
The use of a building for data processing does not qualify it as the subjection of goods or materials to any process and therefore no capital allowance was claimable. . .

Cited by:

Appeal fromGirobank Plc v Clarke (HM Inspector of Taxes) CA 19-Dec-1997
The use of a building for data processing does not qualify it as the subjection of goods or materials to any process and therefore no capital allowance was claimable. . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 08 April 2022; Ref: scu.80844

Girvan (Inspector of Taxes) v Orange Personal Communications Services Ltd: ChD 3 Apr 1998

Interest which was retained by a bank until closure of the account under a firm arrangement to that effect was not taxable as it accrued but only when it came to be due to be paid. Income did not normally arise until it was payable.

Citations:

Gazette 20-May-1998, Times 22-Apr-1998, [1998] 70 TC 682, [1998] STC 567

Statutes:

Income and Corporation Taxes Act 1988 64 70(1)

Corporation Tax, Income Tax

Updated: 08 April 2022; Ref: scu.80848

Glaxo Group Ltd and Others v Inland Revenue Commissioners: ChD 21 Nov 1995

A tax adjustment can be made by the Inland Revenue on an open assessment following transfer pricing enquiry and direction, even after many years. The court considered that the jurisdiction of the special and the general commissioners to determine such issues was exclusive: ‘It is not easy to discern any clear dividing-line between High Court proceedings which are, and those which are not, objectionable as attempts to circumvent the exclusive jurisdiction principle. Possibly the correct view is that there is an absolute exclusion of the High Court’s jurisdiction only when the proceedings seek relief which is more or less co-extensive with adjudicating on an existing open assessment: but that the more closely the High Court proceedings approximate to that in their substantial effect, the more ready the High Court will be, as a matter of discretion, to decline jurisdiction.’

Judges:

Robert Walker J

Citations:

Times 21-Nov-1995, Ind Summary 11-Dec-1995, [1995] STC 1075

Statutes:

Income and Corporation Taxes Act 1988 770

Cited by:

Appeal fromGlaxo Group Ltd v Inland Revenue Commissioners CA 8-Jan-1996
A transfer pricing direction allowed the Inland Revenue to issue adjustments after 6 years. . .
AppliedClaimants under the Loss Relief Group Litigation Order v Inland Revenue Commissioners ChD 3-Mar-2004
Various claimants sought to have issues of law on group relief and other issues settled under a group litigation order.
Held: The High Court had no jurisdiction to hear such matters until they had first been raised in ordinary tax appeals . .
CitedUK Tradecorp Ltd, Regina (on the Application of) v Commissioners for Customs and Excise Admn 10-Nov-2004
The trader had traded in zero-rated goods, leading to a net reclaim of input tax. Having submitted a claim, it sought repayment, and interest on the sums withheld.
Held: No duty fell upon the commissioners until they had accepted the claim to . .
ApprovedAutologic Holdings Plc and others v Commissioners of Inland Revenue HL 28-Jul-2005
Taxpayer companies challenged the way that the revenue restricted claims for group Corporation Tax relief for subsidiary companies in Europe. The issue was awaiting a decision of the European Court. The Revenue said that the claims now being made by . .
AppliedCapper v Chaney and Another ChD 8-Jul-2010
Police had seized substantial sums of cash from the first defendant acting under the 2004 Act. The claimant said that andpound;250,00 was his and sought its return. The Commissioner argued that the current proceedings were an abuse of process.
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 08 April 2022; Ref: scu.80861

Carr (Inspector of Taxes) v Armpledge Ltd; Same v Fielden and Ashworth Ltd: ChD 12 Oct 1998

A company’s settlement of its tax affairs had to be dealt with in chronological order even though it would be from it’s point of view more tax efficient to have them dealt with in reverse order. No right of choice was given to a taxpayer.

Citations:

Times 12-Oct-1998

Statutes:

Income and Corporation Taxes Act 1988 239(3)

Cited by:

Appeal fromCarr (Inspector of Taxes) v Armpledge Ltd; Same v Fielden and Ashworth Ltd CA 24-May-2000
Where a company sought to claim reliefs going back over different tax years, there was no rule requiring such reliefs to be claimed chronologically, but the company could arrange the claims against the several tax years as they best thought fit. . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 08 April 2022; Ref: scu.78911

Revenue and Customs v Investec Asset Finance Plc and Investec Bank Plc (Tax): UTTC 4 Apr 2018

Corporation tax – Purchase by traders of partnership interests and adherence to partnerships followed by realisation and distribution by partnerships of receivables – whether purchase price of partnership interests and contributions to capital of partnerships were capital or revenue expenditure – if revenue, whether incurred wholly and exclusively for purposes of traders’ trades – if revenue incurred wholly and exclusively, whether HMRC entitled to raise further issue not in closure notice – whether partnership profits distributed to traders subject to two tax computations

Citations:

[2018] UKUT 69 (TCC)

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 07 April 2022; Ref: scu.608590

Travel Document Service and Ladbroke Group International v HM Revenue and Customs: CA 20 Mar 2018

The tax payers had become involved in tax arrangements later fund to be tax avoidance.
Held: The appeal failed: ‘the materials before the FTT did not justify the attribution of any of the debits claimed by LGI to anything other than the ‘unallowable purpose’. LGI never supplied particulars of what loan(s) it claimed would have been made to it at what rate(s) of interest and for what period(s) had it not adopted the Deloitte scheme. No such details were, for example, given in LGI’s Notice of Appeal to the FTT, which simply contended that ‘the deductions for interest are allowable for corporation tax purposes’ and that ‘the non-trading loan relationship debits should be allowed against trading profits’. Again, Mr Turner’s witness statement said that the Novations ‘could have been replaced by the payment of dividends’, but did not expand on how or, in particular, what (if anything) LGI would have borrowed for the purpose. ‘

Citations:

[2018] EWCA Civ 549

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 06 April 2022; Ref: scu.606480

Merou Papa Ltd v Revenue and Customs (Income Tax/Corporation Tax : Assessment/Self-Assessment): FTTTx 23 Nov 2017

CORPORATION TAX – application for ‘closure’ notices – para 33 of Schedule 18 to FA 1998 – whether there was a valid enquiry notice under para 24 of Schedule 18 to FA 1998; no – Tribunal has no jurisdiction to exercise – application refused

Citations:

[2017] UKFTT 842 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 02 April 2022; Ref: scu.600968

Khan Properties Ltd v Revenue and Customs (Corporation Tax – Penalty): FTTTx 20 Nov 2017

CORPORATION TAX – penalty for failure to file return in time – whether penalty determination valid: held no, as not made by authorised officer of HMRC – alternatively whether appellant had reasonable excuse – held yes.

Citations:

[2017] UKFTT 830 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 02 April 2022; Ref: scu.600960

Landid Property Ltd, Allen (Concrete) Ltd and Another v Revenue and Customs: FTTTx 13 Sep 2017

Income Tax/Corporation Tax : Employment Income – Income tax, PAYE, NICs and corporation tax – Employee Benefit Trusts – whether contributions to sub-funds established for individual employees or loans from sub-funds to those employees constituted earnings for income tax and NIC purposes – whether corporation tax deduction available

Citations:

[2017] UKFTT 692 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Corporation Tax

Updated: 01 April 2022; Ref: scu.598979

Piggott (Inspector of Taxes) v Staines Investment Ltd: ChD 1 Mar 1995

An arrangement which had the effect of mitigating tax by a pre-ordained series of steps was nevertheless upheld as valid. Transactions were not caught by anti-avoidance provisions, where they were not in fact one composite whole.

Citations:

Gazette 01-Mar-1995, Times 07-Feb-1995

Statutes:

Income and Corporation Taxes Act 1988 239

Jurisdiction:

England and Wales

Corporation Tax, Taxes Management

Updated: 31 March 2022; Ref: scu.84733