Upper Tribunal Tax and Chancery Chamber

UT-2023-000116; - [2025] UKUT 00164 (TCC)

Fecha: 05-Mar-2025

Background

Background

12.

We summarise the background to this appeal. References in our decision to FTT [**] are references to the Decision, unless otherwise specified. The Decision sets out the background facts at FTT [12]-[76] from which the summary below is taken.

13.

Between April 2004 and May 2007 Nellsar acquired five care homes as going concerns:

(1)

Loose Valley;

(2)

Woodstock;

(3)

Silverpoint;

(4)

St Winifred’s; and

(5)

Sonya Lodge.

14.

The parties agreed the following values in respect of the purchase consideration(FTT[25][39][41][51][59][72]:

(1)

Loose Valley: £1,479,950 in respect of the freehold property, £250,050 in respect of goodwill and £60,000 in respect of fixtures and fittings.

(2)

Woodstock: £840,000 in respect of the freehold property, £1,100,000 in respect of goodwill and £60,000 in respect of fixtures and fittings.

(3)

Silverpoint: £1 million in respect of the freehold property, £475,000 in respect of goodwill and £75,000 in respect of fixtures and fittings.

(4)

St Winifred’s: £2,200,000 in respect of the freehold property, £2,225,000 in respect of goodwill and £75,000 for fixtures and fittings.

(5)

Sonya Lodge: £1,869,000 in respect of the freehold property, £1,200,000 in respect of goodwill and £74,000 in respect of fixtures and fittings.

15.

HMRC launched enquiries into Nellsar’s corporation tax returns. HMRC subsequently, on 5 June 2014, issued a discovery assessment (in respect of Nellsar’s accounting period ended 31 October 2006) and closure notices (in respect of its accounting periods ended 31 October 2007, 2009, 2010, 2011 and 2012) and a consequential amendment in respect of the accounting period ended 31 October 2008, all imposing additional corporation tax liabilities on Nellsar on the basis that the amount properly attributable to goodwill in respect of Nellsar’s acquisition of:

(1)

Loose Valley was £60,000 rather than £250,050;

(2)

Woodstock was £75,000 rather than £1,100,000;

(3)

Silverpoint was £50,000 rather than £475,000;

(4)

Saint Winifred’s was £150,000 rather than £2,250,000; and

(5)

Sonya Lodge was £93,000 rather than £1,200,000.

16.

There was no dispute as to the validity of the assessments and closure notices: FTT [75].

17.

On the same date, 5 June 2014, HMRC issued SDLT closure notices in respect of Nellsar’s SDLT returns. These were calculated on the basis of the same goodwill valuation figures, with corresponding upward adjustments to the chargeable consideration attributable to the properties of £1,025,000 (Woodstock) and £425,000 (Silverpoint). The SDLT position as regards the other properties did not form part of the appeal before the FTT. This was because the discovery assessments that had been issued in relation to the other properties were apparently withdrawn after it was established that they contained an error: FTT [76].