The taxpayer company purchased properties to be occupied by other companies within the same group. Having granted leases, they assigned the rental income for the first six years to a bank in return for a capital payment. They then sought relief from tax, claiming to have made a part disposal, and for roll-over relief.
Held: The question of whether a receipt was income or capital is not susceptible to a simple rule of general application. Here factors affecting the decision were that the disposal was of a long lasting asset, the substantial value involved, the diminution of the value of the asset (despite that being impermanent), and that only one lump sum payment was made. The payment was a capital one.
Schiemann, Arden, Dyson LJJ
Times 16-Jan-2003, Gazette 13-Mar-2003, [2002] EWCA Civ 1869, [2002] 1 WLR 35
Bailii
Finance Act 2000 110, Taxation of Chargeable Gains Act 1992 21(2)
England and Wales
Citing:
Cited – MacNiven (Inspector of Taxes) v Westmoreland Investments Ltd HL 15-Feb-2001
The fact that a payment of interest was made only to create a tax advantage did not prevent its being properly claimed. Interest was paid for the purposes of setting it against tax, when the debt was discharged. A company with substantial losses had . .
Cited – Regent Oil Co Ltd v Strick (Inspector of Taxes) HL 27-Jul-1965
HL Income tax, Schedule D – Profits tax – Deduction – Oil dealing company – Exclusivity agreement with retailers – Premises leased from retailer and sublet to him – Whether premium for lease paid on capital or . .
Appeal From – Commissioners of Inland Revenue v John Lewis Properties Ltd ChD 13-Jun-2001
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 . .
Cited by:
Cited – Scribes West Ltd v Relsa Anstalt and others CA 20-Dec-2004
The claimant challenged the forfeiture of its lease by a freeholder which had acquired the registered freehold title but had not yet registered its ownership. The second defendant had forfeited the lease by peacable re-entry for arrears of rent, and . .
Lists of cited by and citing cases may be incomplete.
Updated: 28 July 2021; Ref: scu.178766 br>