UT/2021/000157 - [2024] UKUT 00110 (TCC)

Our conclusion, that we agree with HMRC’s analysis that the FTT made no error of law in holding there was a disposal of the beneficial interest in the distribution rights, means we need not address HMRC’s Rule 24 response which argued that there was, in any case, a part disposal under s21(2)(b) TCGA.

If it were necessary to consider the point then we could see some attraction in the analysis that if Mr Tenconi’s distribution rights were considered as the relevant asset (as opposed to simply his beneficial interest those rights) that the transaction with SHL gave rise to a part disposal under s21(2)(b). That would arise for the straightforward reason that Mr Tenconi’s retention of the legal title would satisfy the words “any description of property derived from the asset remains undisposed of” under s21(2)(b).

Mr Tenconi had argued that HMRC required permission to rely on its part disposal ground and that such permission should not be granted (arguing also that each side should bear its own costs arising out of dealing with HMRC’s Rule 24 response). If it had been necessary to decide this point, we would not have been persuaded that HMRC needed permission to raise it. It was a clear example of HMRC asking for the FTT decision, which had upheld the closure notice, and in relation to which HMRC had been the successful party, to be maintained but on a different basis; HMRC were not seeking to do better on a decision in relation to which they had been unsuccessful. HMRC were also not seeking to raise a new point. This was clear from Mr Tenconi’s reply in the proceedings before us to HMRC’s Rule 24 Response which referred to HMRC’s s21(2)(b) argument in its FTT Statement of Case and from the FTT’s recognition of HMRC’s submissions on the point at [29] of its decision.