TC09562 - [2025] UKFTT 00762 (TC)

Fecha: 23-May-2025

the agreements

the agreements

Introduction

25.

Over the period between CPW’s acquisition of the Businesses from the Vendor Companies between 2004 and 2007 and the decision of the CPW Group to enter into the joint venture which led to the Degrouping in 2008, changing market conditions and falling profits had led the value of the Goodwill to decline considerably. At the point of its acquisition, the Goodwill had had a value of £107,658,000, as noted in paragraph 10(2) above. By the time that CPW was going to leave the CPW Chargeable Gains Group, the Goodwill was valued at approximately £50,800,000. This meant that, if CPW were to leave the CPW Chargeable Gains Group holding the Goodwill, CPW would become liable to a charge to corporation tax under Section 179(3) on value which no longer existed.

26.

It is common ground that:

(1)

the transaction which was effected by the Agreements was designed to avoid that liability. It was intended that:

(a)

by disposing of the Goodwill under the Agreements, CPW would incur a liability to corporation tax on chargeable gains on the amount by which the consideration received by CPW for the Goodwill (£50,799,000) exceeded CPW’s base cost in the Goodwill (nil); and

(b)

no charge to corporation tax on chargeable gains would arise in the hands of CPW in respect of the Goodwill when the Degrouping occurred because CPW no longer held the Goodwill at that point; and

(2)

the Agreements were executed as part of a single transaction and designed as a “package”. They:

(a)

were executed on the same date – 25 June 2008;

(b)

were intended to take effect at the same time;

(c)

were interdependent; and

(d)

should consequently be construed together.