Spring Capital Ltd v Revenue & Customs & Ors [2015] UKFTT 66 (TC) (10 February 2015)

Spring Capital Ltd v Revenue & Customs & Ors [2015] UKFTT 66 (TC) (10 February 2015)

Appellant failed to establish that goodwill was purchased for market value on transfer of trade; no valid evidence of tripartite transaction or purchase agreement. Claims for amortisation deductions and consequential amendments are invalid. Section 343 loss relief not established due to lack of evidence and unresolved quantum of losses. Appeals dismissed for deductions for amortisation of goodwill; quantum of losses under section 343 ICTA 1988 adjourned pending outcome of separate appeal by predecessor company.

Citation
[2015] UKFTT 66
Parties
Appellant: Spring Capital Ltd; First Respondent: The Commissioners for Her Majesty’s Revenue & Customs; Second Respondent: Roderick Thomas; Third Respondent: Stuart Thomas; Fourth Respondent: Spring Salmon & Seafoods Ltd
Jurisdiction
United Kingdom
Judgment Date
10 February 2015
Procedural Posture
Corporation Tax Appeal / First Tier Tribunal Decision
Outcome
Appeals dismissed in relation to deductions for amortisation of goodwill; issue of quantum of losses under section 343 ICTA 1988 adjourned.
Legal Topics
Amortisation of Goodwill, Transfer of Trade, Loss Relief Under Section 343 ICTA 1988, Validity of Consequential Amendments, Claims for Relief Under Schedule 18 FA 1998
Tax Law Corporation Tax Amortisation of Goodwill Transfer of Trade Loss Relief Under Section 343 ICTA 1988 Validity of Consequential Amendments Claims for Relief Under Schedule 18 FA 1998

Case Brief

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Parties

Spring Capital Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

First Respondent

Roderick Thomas

Second Respondent

Stuart Thomas

Third Respondent

Spring Salmon & Seafoods Ltd

Fourth Respondent

Procedural Posture

Corporation Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether goodwill was purchased on a transfer of trade in September 2004 or a migration of trade
  2. 2 Principles for determining market value of goodwill on transfer of trade
  3. 3 Whether trading losses were transferred to the appellant under section 343 ICTA 1988

Ratio Decidendi

Appellant failed to establish that goodwill was purchased for market value on transfer of trade; no valid evidence of tripartite transaction or purchase agreement. Claims for amortisation deductions and consequential amendments are invalid. Section 343 loss relief not established due to lack of evidence and unresolved quantum of losses. Appeals dismissed for deductions for amortisation of goodwill; quantum of losses under section 343 ICTA 1988 adjourned pending outcome of separate appeal by predecessor company.

Court Disposition

Appeals dismissed in relation to deductions for amortisation of goodwill; issue of quantum of losses under section 343 ICTA 1988 adjourned.

Orders

  • No deduction allowed for amortisation of goodwill.
  • No valid consequential amendment to 2008 return.