TC09562 - [2025] UKFTT 00762 (TC)

This decision relates to the potential application of Section 179(3) of the Taxation of Chargeable Gains Act 1992 (the “TCGA 1992”) (“Section 179(3)”) to the goodwill relating to four businesses which had been transferred to the Appellant, formerly called The Carphone Warehouse Limited (“CPW”), between 2004 and 2007, in consequence of CPW’s leaving the UK chargeable gains group headed by The Carphone Warehouse Group plc (“CPWG plc”) (the “CPW Chargeable Gains Group”) of which CPW had been a member (the “Degrouping”) in 2008.

The Degrouping arose out of an arrangement entered into between the corporate group headed by CPWG plc (the “CPW Group”) and the corporate group headed by Best Buy Co. Inc. (USA) (“BBCo”) (the “BB Group”).

Section 179(3), together with Section 179(1) of the TCGA 1992 which brings it into operation, provides that, where a company leaves a UK chargeable gains group owning an asset (other than a trading asset) which it has acquired from another member of the same UK chargeable gains group within the previous six years, then the company is deemed to dispose of, and immediately re–acquire, that asset at the market value of the asset at the time of the intra–group acquisition.

The potential relevance of the provision in the present context is that CPW left the CPW Chargeable Gains Group within six years of acquiring the goodwill described above from the Vendor Companies (as defined in paragraph 8 below), which were all members of the CPW Chargeable Gains Group at the time of CPW’s acquisition. Accordingly, if, at the time of the Degrouping, CPW continued to own the goodwill and the goodwill was not a trading asset, then a charge under Section 179(3) will have arisen.

Prior to the hearing, the parties agreed the following facts for the purposes of this appeal.