UT (Tax & Chancery) UT/2023/000103 - [2025] UKUT 00102 (TCC)

Thus, although there was an error of law in the FTT’s decision because it misunderstood the meaning of “commercial context”, there is no change to the outcome. The only asset transferred under the Formwise Contract was the domain name, and this had a negligible value. It follows that the £145,000 received by Formwise was an unauthorised payment, such as to give rise to an unauthorised payment charge and surcharge, and to a scheme sanction charge.

We mention a further possible point, even though it has not been the subject of argument. If “domain name” had been interpreted to include the website, a further issue would have arisen on what was meant by the ‘website’ and how it should have been valued – was it the cost of replacement i.e. the cost of writing the code to create an equivalent website or should the valuation have included some or all of the goodwill generated by the use of the website in the business. The valuation of £145,000 seems to have included goodwill, but there is no reference to this in the contract

The Langford Pension Funding Deal which was the subject of the HMRC assessment was the receipt of a loan from the SSAS secured by IP; the nature of that IP was similarly in dispute.