A group of companies took leases from a company within the group. That company, in turn factored the right to receive the rents for five years to another company in return for a capital payment representing the discounted value of the future rent receipts. It then claimed this as a capital rather than an income receipt, and was taxable accordingly. The Commissioners asserted that it remained income.
Held: The appeal failed. The case fell to be decided by the common law of tax rather than statute law. The sale was of an asset not in the course of trade and, as such, and however reluctantly, had to be held to produce a capital receipt and taxed accordingly.
Lightman J
Times 22-Jun-2001, Gazette 05-Jul-2001, [2001] EWHC Ch 409, [2002] 1 WLR 35, [2001] STC 1118, [2001] BTC 213, [2001] STI 937
Bailii
England and Wales
Cited by:
Appeal From – Inland Revenue Commissioners v John Lewis Properties Ltd CA 20-Dec-2002
The taxpayer company purchased properties to be occupied by other companies within the same group. Having granted leases, they assigned the rental income for the first six years to a bank in return for a capital payment. They then sought relief from . .
Lists of cited by and citing cases may be incomplete.
Updated: 28 July 2021; Ref: scu.163025