TC09562 - [2025] UKFTT 00762 (TC)

In conclusion, it is apparent that, after the Agreements became effective and at the point when CPW left the CPW Chargeable Group, the legal rights and obligations to which the Agreements gave rise were such that:

At the hearing, Mr Gammie repeatedly referred to the arrangement effected by the Agreements as being one where it was BBUK alone that carried on the Businesses albeit through the agency of CPW. He described the arrangement as being analogous to one where a greengrocer sold his business to a third party but agreed to stay on and run the business for the new owner as an undisclosed agent for the new owner. In my view, where that analogy falls short is that, in that example, whilst the original owner would deal with customers as agent for the new owner, and customers might not know that the sale had occurred, the original owner would simply be providing a service to the new owner. Control over the strategic direction of the business would be held by the new owner and the economic risks and rewards of owning the business would be held by the new owner. It would be the new owner and not the original owner/agent who would be exposed to changes in the profitability of the business. In contrast, in this case, whilst BBUK was exposed to changes in the future gross revenues of the Businesses, because they would determine the quantum of the payments it received, it had no control over the strategic direction of the Businesses and no exposure to the profitability of the Businesses because it had no responsibility for, or exposure to, any of the expenses arising in relation to the Businesses.