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

What happened after the initial contact between Clifton and the employer changed around 2011. Until then, the next stage was for Clifton to meet with the employer to form an initial view of the viability of the transaction, referred to as the “initial review” [155].

Clifton then instructed a firm of local accountants to value the IP [177]; these firms had business valuation expertise [167] but no experience in valuing IP [192]. The fee paid for some of these valuations was £250, which the FTT said “suggests that not much care could have been taken in producing them” [172].

If there was too great a gap between the employer’s funding needs and the value of the available IP assets, the deal would be abandoned. About 5% of deals were dropped at this stage, for reasons such as the existence of a charge over IP which could not be released (so limiting the available IP assets) [155]. As soon as the process got past this stage, no substantial challenge to the valuation occurred [178], and Clifton had no incentive to challenge the valuations [171].

There would also be meetings between Clifton and MLA, following which MLA would carry out various administrative tasks. Just before the Pension Funding Deal went live, there was a final review, referred to as a “debrief”, in which a check list was completed by an MLA administrator and signed off by an MLA technician and another senior member of MLA, often Mr Dowding, a director of that company [155].

Three of the Pension Funding Deals considered by the FTT fell within this period: Prisym, Formwise and Langford.