Regina 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 companies. She argued that the section gave a discretion as to the finding of an association. The wording placed no discretion in any person, and the words were not facultative, but conditional. The concluding words of the section were not part of the definition of control, but were a special qualification of the definition to be used in a case where it fell to be decided whether one limb of the definition was satisfied.
HL Corporation tax – Reliefs – Small companies relief- – Amount of relief – Restrictions on amount of relief – Restriction where company has one or more associated companies – Control of companies – Attribution to individual of rights and powers of associates – Individual associated to two sets of trustees who respectively controlled two companies – Whether the two companies associated – Whether attribution of rights and powers of associates a matter of general discretion to be exercised by Revenue only if considered appropriate to facts of the particular case – Income and Corporation Taxes Act 1988, s 13, 416 and 417.
The phrase ‘may be attributed’ does not confer a discretion on HMRC and ‘may’ in effect means ‘shall’ and ‘Even without subsection (6), the definition of control is wide and can apply to people who have no real control over the company’s affairs.’
‘The effect of these cumulative definitions [in sections 416 and 417] is that for the purposes of deciding whether a person ‘shall be taken to have control of a company’ under section 416(2) it may be necessary to attribute to him the rights and powers of persons over whom he may in real life have little or no power of control. Plainly the intention of the legislature was to spread the net very wide.’


Times 08-Jun-2001, Gazette 21-Jun-2001, [2001] STC 901, [2001] UKHL 27, [2001] 1 WLR 1111, [2001] UKHL TC – 73 – 532, [2001] BTC 196, [2001] STI 851, [2001] 4 All ER 400, 73 TC 532


Bailii, House of Lords, Bailii


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


England and Wales


Appeal fromRegina 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 . .
At first instanceRegina 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:

CitedGascoines Group Limited, Newark Cattle Market Company Limited, Saracens Securities Limited v HM Inspector of Taxes ChD 30-Mar-2004
Small companies relief – associated companies
Lightman J said: ‘As is apparent from its terms associated companies are defined in section 13(4) of the 1988 Act as companies of which one company controls or is controlled by another or which are . .
CitedWaterside Escapes Ltd v Revenue and Customs FTTTx 13-Oct-2020
Qualifying Property Rental – Stamp Duty Relief
SDLT – higher threshold interest 15% rate – relief for a qualifying property rental business – intention that a non-qualifying individual be permitted to occupy a dwelling on the land (paragraph 5(2), Schedule 4A, FA 2003) – whether a non-qualifying . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 01 February 2022; Ref: scu.88512