Delinian Limited v The Commissioners for HMRC

Delinian Limited v The Commissioners for HMRC

Section 137(1) requires the tribunal to consider whether the entire exchange forms part of a scheme or arrangements of which the main purpose, or one of the main purposes, is tax avoidance. The tribunal is not required to dissect the arrangements into parts to identify any element with a tax avoidance purpose. The FTT was correct to consider the arrangements as a whole, and its finding that tax avoidance was not a main purpose is determinative. The appeal is dismissed.

Parties
Appellant/respondent: Delinian Limited (formerly Euromoney Institutional Investor PLC); Respondent/appellant: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Capital Gains Tax, Corporation Tax, Share Exchange, Tax Avoidance, Statutory Interpretation
Tax Law Corporate Law Capital Gains Tax Corporation Tax Share Exchange Tax Avoidance Statutory Interpretation

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Parties

Delinian Limited (formerly Euromoney Institutional Investor PLC)

Appellant/respondent

The Commissioners for His Majesty’s Revenue and Customs

Respondent/appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 What is the proper scope of sections 135 to 137 of the Taxation of Chargeable Gains Act 1992 regarding share exchanges and tax deferral?
  2. 2 Does the exchange in question form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to capital gains tax or corporation tax under section 137(1)?
  3. 3 How should 'scheme or arrangements' be identified for the purposes of section 137(1)?

Ratio Decidendi

Section 137(1) requires the tribunal to consider whether the entire exchange forms part of a scheme or arrangements of which the main purpose, or one of the main purposes, is tax avoidance. The tribunal is not required to dissect the arrangements into parts to identify any element with a tax avoidance purpose. The FTT was correct to consider the arrangements as a whole, and its finding that tax avoidance was not a main purpose is determinative. The appeal is dismissed.

Court Disposition

Appeal dismissed