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Procedural background
Procedural background
CPW filed its company tax return for the accounting period ended 31 March 2009 on the basis that no degrouping charge arose under Section 179(3) as a result of the transactions described in paragraphs 15 and 16 above.
On 23 February 2011, the Respondents opened an enquiry into CPW’s company tax return for that accounting period.
On 26 August 2020, the Respondents issued a partial closure notice (the “PCN”) which concluded that a degrouping charge under Section 179(3) arose on £107,658,000 of goodwill attached to the Businesses upon the formation of the joint venture between the CPW Group and the BB Group. On that basis, the Respondents determined that additional corporation tax of £30,144,240 was due.
On 11 September 2020, CPW notified its appeal to the Respondents by letter.
On 24 May 2022, CPW requested that the Respondents review the conclusion set out in the PCN.
On 15 September 2022, the Respondents’ review upheld the conclusion set out in the PCN.
On 14 October 2022, CPW lodged an appeal with the First–tier Tribunal (the “FTT”) against the conclusion and amendment set out in the PCN.
- Heading
- Introduction
- Key parties
- Acquisition of the Businesses
- The SPA and the MSA
- The Degrouping
- Procedural background
- the agreed issues
- the agreements
- The SPA
- The MSA
- The Side Letter
- Initial observations on the Agreements and the Side Letter
- other documents
- The Prior SPAs
- The Property Services Agreement
- The Brand Licence
- The Accounts
- The Invoice
- “ About the matter we have finished checking
- “Partial closure notice (PCN)
- The issues – a summary
- Issue One – applicability of the authorities in relation to statutory construction
- Conclusion
- “15 In the task of ascertaining whether a particular statutory provision imposes a charge, or grants an exemption from a charge, the Ramsay approach is generally described – as it is in the statements
- Issue Two – the scope of the rule prohibiting assignment “in gross”
- Conclusion
- Issue Three – ownership of the Businesses following the execution of the Agreements
- Conclusion
- No provision in the Agreements for the transfer of the Businesses
- No provision in the Agreements for the transfer of assets other than Goodwill or the assumption of any liabilities
- No transfer of employees
- Did BBUK carry on the Businesses after the Agreements became effective?
- This meant that the only way that BBUK could carry on the Businesses was through CPW as its agent. In that regard, I do not doubt the fact that it is possible for a company to carry on a business thro
- Entitlement to the profits of the Businesses
- Conclusion in relation to the ability to dictate the overall strategy and direction of the Businesses and entitlement to the profits of the Businesses
- Final observations
- Conclusion
- Issue Four – assignment in equity
- Conclusion
- Issue Five – not the same asset
- Conclusion
- Issue Six – the relevance of the transaction effected by Agreements in the event that Section 179(3) applied
- Conclusion
- Issue Seven – the tax consequences of the transaction effected by Agreements in the event that Section 179(3) applied
- Conclusions