TC09562 - [2025] UKFTT 00762 (TC)

Mr Gammie said that, although the “conclusion about the matter” set out in the PCN was simply to the effect that a degrouping charge arose under Section 179 of the TCGA 1992, the “description of the matter”, as set out in the PCN, was stated to be the application of Section 179 of the TCGA 1992, as a whole, to the Goodwill. It followed that the “matter” was the application of Section 179 of the TCGA 1992 as a whole and therefore it was not correct for the FTT in determining this appeal against the PCN to deal solely with the charge under Section 179(3) without going on to consider the impact of that charge on the tax consequences of the transaction effected by the Agreement. Although he accepted that the PCN had said that the conclusion reached by the Respondents in relation to Section 179(3) did not affect anything else that the Respondents were still checking in CPW’s company tax return for the relevant accounting period, he said that that disclaimer was referring to matters arising in respect of the relevant accounting period which were completely unrelated to the application of Section 179 of the TCGA 1992.

He added that, if the PCN had been a final closure notice instead of a partial closure notice, then the way that the matter had been described would have required a determination of the impact of the charge under Section 179(3) on the tax consequences of the transaction effected by the Agreements because that was what was required by Section 179 of the TCGA 1992 as a whole.

Finally, he pointed out that the issues agreed by the parties in advance of the hearing included the effect of the Agreements on the quantum of the tax due – see paragraph 24(2)(b) above. That would not have been the case if the tax implications of the Agreements were outside the scope of this appeal. In any event, the quantum of the charge under Section 179(3) itself was agreed.

Mr Brinsmead–Stockham said that this appeal was against the PCN, which related solely to the application to CPW of Section 179(3) in respect of the Goodwill. It followed that that was the only matter which needed to be addressed in these proceedings. The potential adjustments to be made to the tax consequences of the transaction effected by the Agreements were not relevant to the application of Section 179(3) as it was common ground that, pursuant to Sections 179(4) and 179(13) of the TCGA 1992, the transaction effected by the Agreements was to be treated as taking place after the disposal and re–acquisition under Section 179(3). Accordingly, those adjustments were something to be addressed in due course by agreement or, if necessary, by way of the issue of a further partial closure notice or final closure notice and subsequent appeal.

Mr Brinsmead–Stockham said that the fact that the tax implications of the transaction effected by the Agreements did not need to be addressed in this appeal against the PCN was tolerably clear from the nature of the PCN as a partial closure notice and the terms of the PCN. However, if any doubt remained on that point, the terms of the PCN Correspondence put it beyond doubt. In the PCN Correspondence, the parties had clearly agreed that any consideration of the tax implications of the transaction effected by the Agreements was an “other matter” which would be addressed in due course once the application or otherwise of Section 179(3) had been determined.