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)

The Tribunal found that the appellant failed to provide sufficient evidence of a bona fide purchase of goodwill at market value and did not establish the existence of the tripartite transaction as claimed. The claims for amortisation deductions under Schedule 29 FA 2002 and carried forward losses under section 343 ICTA 1988 were not substantiated. The consequential amendments and relief claims for the relevant periods were invalid due to procedural defects and lack of supporting documentation.

Citation
[2015] UKFTT 66 (TC)
Parties
Appellant: Spring Capital Ltd; First Respondent: 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 Judgment
Outcome
Appeals dismissed in relation to deductions for amortisation of goodwill; issue of quantum of losses under section 343 ICTA 1988 adjourned pending outcome of separate appeal by predecessor company.
Legal Topics
Amortisation of Goodwill, Transfer of Trade, Loss Relief, Schedule 29 FA 2002, Section 343 ICTA 1988, Contracts (third Parties) Act 1999, Consequential Amendment, Validity of Claims
Tax Law Corporation Tax Amortisation of Goodwill Transfer of Trade Loss Relief Schedule 29 FA 2002 Section 343 ICTA 1988 Contracts (third Parties) Act 1999 +2 more

Case Brief

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Parties

Spring Capital Ltd

Appellant

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 Judgment

Legal Issues

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

Ratio Decidendi

The Tribunal found that the appellant failed to provide sufficient evidence of a bona fide purchase of goodwill at market value and did not establish the existence of the tripartite transaction as claimed. The claims for amortisation deductions under Schedule 29 FA 2002 and carried forward losses under section 343 ICTA 1988 were not substantiated. The consequential amendments and relief claims for the relevant periods were invalid due to procedural defects and lack of supporting documentation.

Court Disposition

Appeals dismissed in relation to deductions for amortisation of goodwill; issue of quantum of losses under section 343 ICTA 1988 adjourned pending outcome of separate appeal by predecessor company.

Orders

  • No deduction allowed for amortisation of goodwill under Schedule 29 FA 2002.
  • No relief allowed for carried forward losses under section 343 ICTA 1988 for relevant periods.