Kellogg Brown & Root Holdings (UK) Ltd v Revenue & Customs

Kellogg Brown & Root Holdings (UK) Ltd v Revenue & Customs

The appellant and purchaser were connected persons at the relevant time because a group of shareholders controlled both companies, satisfying s.286(5)(b) TCGA and s.416 ICTA. The timing of the disposal was determined by s.28(2) TCGA, being when the condition was satisfied, and the statutory provisions do not require commonality of purpose among shareholders for control to be attributed.

Parties
Appellant: Kellogg Brown & Root Holdings (UK) Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
England and Wales
Judgment Date
24 March 2009
Procedural Posture
Appeal / Judgment
Outcome
Appeal dismissed
Legal Topics
Connected Persons, Capital Gains Tax, Control of Companies, Loss Relief, Interpretation of Statutory Provisions
Tax Law Corporate Law Connected Persons Capital Gains Tax Control of Companies Loss Relief Interpretation of Statutory Provisions

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Parties

Kellogg Brown & Root Holdings (UK) Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Whether the appellant and purchaser were 'connected persons' under s.286(5)(b) TCGA at the relevant time
  2. 2 Whether s.28 TCGA determines the timing for assessing connection
  3. 3 Whether groups of shareholders constitute 'control' under s.416 ICTA

Ratio Decidendi

The appellant and purchaser were connected persons at the relevant time because a group of shareholders controlled both companies, satisfying s.286(5)(b) TCGA and s.416 ICTA. The timing of the disposal was determined by s.28(2) TCGA, being when the condition was satisfied, and the statutory provisions do not require commonality of purpose among shareholders for control to be attributed.

Court Disposition

Appeal dismissed

Orders

  • Set off of capital loss against chargeable gains denied
  • Decision of Special Commissioner upheld