swarb.co.uk - law index
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Corporation Tax - From: 1985 To: 1989
This page lists 9 cases, and was prepared on 27 May 2018.
Scorer v Olin Energy Systems Ltd (1985) 58 TC 592; [1985] UKHL 3; [1985] 2 All ER 375; [1985] AC 645
1985
HL
Lord Fraser of Tullybelton, Lord Keith of Kinkel, Lord Bridge of Harwich, Lord Brightman, Lord Templeman
Corporation Tax
Where an appeal against an assessment to tax had been settled by agreement, any dispute as to the scope of that agreement was to be viewed objectively, having regard to the surrounding circumstances, including all the material known to be in the Inspector's possession.
1 Citers
[ Bailii ]
Reed v Nova Securities Ltd [1985] 1 WLR 193
1985
Corporation Tax
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'
1 Citers
Coates and Reed (Inspectors of Taxes) v Nova Securities Ltd and Arndale Properties [1985] UKHL TC_59_516; [1985] 1 WLR 193; [1985] STC 124; [1985] PCC 209; [1985] 1 All ER 686; 59 TC 516
31 Jan 1985
HL
Corporation Tax
HL Corporation tax - Group relief - Trading stock - Whether assets acquired as trading stock by one group company from another - Whether prospective capital loss effectively transmuted into a trading loss available for group relief - Income and Corporation Taxes Act 1970, ss 273, 274(1) - Finance Act 1965, Sch 7 para 1(1) and (3).
[ Bailii ]
Lord Advocate v R W Forsyth Ltd; 1986 - (1986) 61 TC 1
Elliss v BP Oil Northern Ireland Refinery Ltd [1987] 1 FTLR 253; [1987] STC 52
1987
CA
Corporation Tax
The company had incurred capital expenditure in machinery and plant for trading before 1972. The 1975 Act prevented them claiming the expenditure as losses, and they sought to carry them forward to 1973 when additional claims were possible. The Revenue said that the allowances had to be claimed in the periods incurred. Held: The Crown's appeal failed. The legislation did not oblige companies to take the allowances in the year as suggested.
Finance Act (No 2) 1975 2
1 Citers
Wimpy International Ltd v Warland [1988] SDTC 149; (1988) 61 TC 51
1988
Hoffmann J, Fox LJ, Lloyd LJ
Corporation Tax
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."
1 Citers
Craven (IOT) v White (Stephen); Inland Revenue Commissioners v Bowater Property Developments [1989] AC 398; [1988] 3 All ER 495; [1988] 3 WLR 423
1989
HL
Lord Keith of Kinkel, Lord Jauncey of Tullichettle, Lord Oliver of Aylmerton, Lord Templeman and Lord Goff of Chieveley
Corporation Tax
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."
1 Cites
1 Citers
Overseas Containers (Finance Ltd) v Stoker; 1989 - [1989] 1 WLR 606
Collard (Inspector of Taxes) v Mining and Industrial Holdings Ltd [1989] UKHL TC_62_448
13 Apr 1989
HL
Corporation Tax
HL Double taxation relief - UK resident company in receipt of dividends from companies resident abroad - Whether relief by way of credit to be given for foreign taxes on such dividends before or after advance corporation tax in respect of distributions made by it is set against its liability to corporation tax - Double Taxation Relief (Taxes on Income) (Australia) Order 1968, (S.I. 1968 No.305), Article 19(1); Income and Corporation Taxes Act 1970, ss 497(1), 501, 505; Finance Act 1972, 5 85(1), s 100(4) and (6) - Construction of Act - Whether legislative gap to be filled.
[ Bailii ]
