Lloyds UDT Finance Ltd v. Chartered Trust Holdings Plc & Ors [2001] EWHC Ch 459 (22nd November, 2001)

Lloyds UDT Finance Ltd v. Chartered Trust Holdings Plc & Ors [2001] EWHC Ch 459 (22nd November, 2001)

Section 35(2) Capital Allowances Act 1990 applies to all rental payments made by Autolease to UDT under the Master Agreement for motor cars with a retail price exceeding £12,000, regardless of whether the cars are sub-hired to third parties or used as trading stock or plant. The statutory restriction is not limited by the status of the hirer as an intermediate lessor or by the use to which the vehicle is put, except as expressly provided in the Act.

Citation
[2001] EWHC Ch 459
Parties
Claimant: Lloyds UDT Finance Limited; Defendants/part 20 Claimants: Chartered Finance Trust Holdings Plc and Others; Additional Party: The Commissioners of the Inland Revenue; Part 20 Defendant: Britax International GMBH
Jurisdiction
England and Wales
Procedural Posture
Chancery Division Civil Claim With Part 20 Proceedings / Judgment After Trial on Preliminary Issue
Outcome
Declaration granted in favour of Lloyds UDT and the Inland Revenue; s.35(2) applies to all relevant rental payments.
Legal Topics
Capital Allowances, Finance Leases, Tax Deductibility, Expensive Motor Cars, Interpretation of Statutes
Tax Law Commercial Law Capital Allowances Finance Leases Tax Deductibility Expensive Motor Cars Interpretation of Statutes

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Parties

Lloyds UDT Finance Limited

Claimant

Chartered Finance Trust Holdings Plc and Others

Defendants/part 20 Claimants

The Commissioners of the Inland Revenue

Additional Party

Britax International GMBH

Part 20 Defendant

Procedural Posture

Chancery Division Civil Claim With Part 20 Proceedings / Judgment After Trial on Preliminary Issue

Legal Issues

  1. 1 Does s.35(2) Capital Allowances Act 1990 apply to rental payments made by an intermediate lessor (Autolease) under a finance lease for motor cars with a retail price exceeding £12,000, where the cars are sub-hired to third parties?
  2. 2 Is the expenditure by Autolease under the Master Agreement 'expenditure on the hiring of a motor car' within the meaning of s.35(2)?
  3. 3 Should the statutory restriction be construed to exclude intermediate lessors or vehicles acquired as trading stock or plant?

Ratio Decidendi

Section 35(2) Capital Allowances Act 1990 applies to all rental payments made by Autolease to UDT under the Master Agreement for motor cars with a retail price exceeding £12,000, regardless of whether the cars are sub-hired to third parties or used as trading stock or plant. The statutory restriction is not limited by the status of the hirer as an intermediate lessor or by the use to which the vehicle is put, except as expressly provided in the Act.

Court Disposition

Declaration granted in favour of Lloyds UDT and the Inland Revenue; s.35(2) applies to all relevant rental payments.

Orders

  • Declaration that s.35(2) Capital Allowances Act 1990 applies to all rental payments made by Autolease to UDT for cars with a retail price exceeding £12,000 under the Master Agreement.
  • Further orders to be made as needed in the circumstances of the case.