TC09562 - [2025] UKFTT 00762 (TC)

Fecha: 23-May-2025

Issue Seven – the tax consequences of the transaction effected by Agreements in the event that Section 179(3) applied

Issue Seven – the tax consequences of the transaction effected by Agreements in the event that Section 179(3) applied

The parties’ submissions

187.

Mr Gammie said that, if a charge under Section 179(3) arose in respect of the Goodwill, then CPW would be treated as having re–acquired the Goodwill for £107,658,000 at the start of the accounting period in which CPW left the CPW Chargeable Gains Group.

188.

CPW’s subsequent receipt in that accounting period of £50,800,000 from BBUK would then have amounted to a part disposal of that Goodwill pursuant to Section 22 of the TCGA 1992 because the sum in question was a capital sum derived from the Goodwill. The Goodwill derived its value from the anticipated future profits of the Businesses and, at the time when the Agreements were executed:

(1)

that value was equal to the amount paid by BBUK under the SPA; and

(2)

the sum paid by BBUK for the Goodwill was attributable to its right to receive part of those future profits (in the form of a fixed percentage of the future gross revenues of the Businesses).

It therefore followed that the amount received by CPW from BBUK must have “derived from” the Goodwill for the purposes of Section 22 of the TCGA 1992.