Nowosielski v Revenue & Customs [2012] UKFTT 212 (TC) (23 March 2012)

Nowosielski v Revenue & Customs [2012] UKFTT 212 (TC) (23 March 2012)

The appellant was entitled to tax relief on the interest paid to HSBC plc because Vanfame Limited and Andrew Pinchin Architects Limited were associated companies within the meaning of section 416, and the appellant had a material interest in Vanfame Limited as a loan creditor entitled to more than 5% of the assets on winding up, satisfying the requirements of section 360A(1)(b).

Citation
[2012] UKFTT 212 (TC)
Parties
Appellant: Antoni Nowosielski; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
23 March 2012
Procedural Posture
Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal allowed
Legal Topics
Income Tax, Corporation Tax, Exemptions and Reliefs, Loan Interest Deduction, Associated Companies, Material Interest
Tax Law Income Tax Corporation Tax Exemptions and Reliefs Loan Interest Deduction Associated Companies Material Interest

Case Brief

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Parties

Antoni Nowosielski

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether the appellant is entitled to tax relief on interest paid to HSBC plc for monies lent to Vanfame Limited under the Income and Corporation Taxes Act 1988, considering the requirements of associated companies and material interest.

Ratio Decidendi

The appellant was entitled to tax relief on the interest paid to HSBC plc because Vanfame Limited and Andrew Pinchin Architects Limited were associated companies within the meaning of section 416, and the appellant had a material interest in Vanfame Limited as a loan creditor entitled to more than 5% of the assets on winding up, satisfying the requirements of section 360A(1)(b).

Court Disposition

Appeal allowed

Orders

  • The appellant is entitled to relief against the interest payments made by him to HSBC plc in respect of monies lent by him to Vanfame Limited.
  • The amended assessments dated 01 February 2011 are set aside.