Curran v Revenue & Customs [2012] UKFTT 517 (TC) (14 August 2012)

Curran v Revenue & Customs [2012] UKFTT 517 (TC) (14 August 2012)

The Tribunal held that the payments made by Mr Curran were not payments of interest eligible for relief under s 353 ICTA, as they constituted capital payments extinguishing future interest obligations, or repayments of principal. Even if considered interest, relief was denied for amounts exceeding a reasonable commercial rate and under s 787 ICTA, as the main benefit was tax reduction. The settlement agreement did not preclude HMRC from raising discovery assessments or amendments, was not binding for future years, and was voidable for material non-disclosure.

Citation
[2012] UKFTT 517
Parties
Appellant: Garrett Paul Curran; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
14 August 2012
Procedural Posture
Statutory Appeal (first Tier Tribunal, Tax) / Final Judgment
Outcome
Appeal dismissed
Legal Topics
Income Tax, Corporation Tax, Interest Relief, Settlement Agreements, Anti Avoidance
Tax Law Income Tax Corporation Tax Interest Relief Settlement Agreements Anti Avoidance

Case Brief

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Parties

Garrett Paul Curran

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Statutory Appeal (first Tier Tribunal, Tax) / Final Judgment

Legal Issues

  1. 1 Whether payments made by Mr Curran in respect of three loans constitute 'interest' eligible for relief under s 353 ICTA
  2. 2 Whether the payments were in excess of a reasonable commercial rate
  3. 3 Whether the sole or main benefit expected to accrue was tax relief, triggering s 787 ICTA anti-avoidance

Ratio Decidendi

The Tribunal held that the payments made by Mr Curran were not payments of interest eligible for relief under s 353 ICTA, as they constituted capital payments extinguishing future interest obligations, or repayments of principal. Even if considered interest, relief was denied for amounts exceeding a reasonable commercial rate and under s 787 ICTA, as the main benefit was tax reduction. The settlement agreement did not preclude HMRC from raising discovery assessments or amendments, was not binding for future years, and was voidable for material non-disclosure.

Court Disposition

Appeal dismissed

Orders

  • No relief for payments under s 353 ICTA
  • Discovery assessments and closure notice upheld