Delinian Ltd (Formerly Euromoney Institutional Investor PLC) v Commissioners for His Majesty's Revenue and Customs [2023] EWCA Civ 1281 (03 November 2023)

Delinian Ltd (Formerly Euromoney Institutional Investor PLC) v Commissioners for His Majesty's Revenue and Customs [2023] EWCA Civ 1281 (03 November 2023)

Section 137(1) TCGA 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, considering the scheme or arrangements as a whole. The FTT and UT were correct to reject HMRC's approach of isolating parts of the scheme. Since the avoidance of tax was not a main purpose of the arrangements as a whole, the statutory deferral was available.

Citation
[2023] EWCA Civ 1281
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
03 November 2023
Procedural Posture
Tax Appeal / Court of Appeal Judgment on Appeal From Upper Tribunal
Outcome
Appeal dismissed
Legal Topics
Capital Gains Tax, Corporation Tax, Share Exchanges, Tax Avoidance, Statutory Interpretation
Tax Law Corporate Law Capital Gains Tax Corporation Tax Share Exchanges 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

Tax Appeal / Court of Appeal Judgment on Appeal From Upper Tribunal

Legal Issues

  1. 1 Proper construction of section 137(1) of the Taxation of Chargeable Gains Act 1992 regarding tax deferral on share exchanges
  2. 2 Whether the exchange formed part of a scheme or arrangements of which the main purpose, or one of the main purposes, was tax avoidance
  3. 3 Whether the scheme or arrangements should be considered as a whole or in parts for the purposes of section 137(1)

Ratio Decidendi

Section 137(1) TCGA 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, considering the scheme or arrangements as a whole. The FTT and UT were correct to reject HMRC's approach of isolating parts of the scheme. Since the avoidance of tax was not a main purpose of the arrangements as a whole, the statutory deferral was available.

Court Disposition

Appeal dismissed

Orders

  • HMRC's appeal dismissed
  • Euromoney's cross-appeal (Respondent's Notice) dismissed