Upper Tribunal Tax and Chancery Chamber

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

Fecha: 05-Mar-2025

Table of contents:

Introduction 2

Background 3

The issues before the FTT – in outline 4

The statutory provisions, frs and rics materials 5

Corporation tax 5

Stamp Duty Land Tax 6

Companies Act, Financial Reporting Standards and RICS Appraisal and Valuation Manual 6

The FTT’s Decision 9

The Decision - Corporation tax legislation 9

The Decision - Corporation Tax and the Accounting context: 11

The Decision - The Court of Appeal decision in Denning 13

The Decision - The FTT’s main conclusions on accounting and valuation: 13

The Decision - Stamp Duty Land Tax 15

The Decision – the FTT’s summary and conclusions 15

Nellsar’s grounds of appeal 15

Ground 1: The FTT erred in considering whether there was an open market in assets similar in type and condition to the identifiable assets. 15

Ground 2: The FTT imported a valuation technique which was not prescribed by FRS 7.9. 15

Ground 3: The FTT misconstrued FRS 7.9 by holding that if there was a possible valuation technique available (starting with market value), then FRS 7.9 (b) could not apply. 15

Ground 4: (1) The FTT erred in concluding that Nellsar’s accounts were not compliant with GAAP and (2) in any event the allocation was just and reasonable. 15

Ground 5: The FTT erred by rejecting Nellsar’s apportionment of the consideration paid for the care homes for SDLT purposes as not “just and reasonable”. 15

HMRC’s grounds of appeal 15

Nellsar’s appeal - Grounds 1, 2, 3 and 4(1) 15

Submissions in outline – Grounds 1, 2, 3 and 4(1) 15

Relevant general principles- Grounds 1, 2, 3 and 4(1) 15

HMRC v Denning [2022] EWCA Civ 909 (“Denning”) 15

Discussion: Grounds 1, 2, 3 and 4(1) 15

Nellsar’s appeal - Ground 4 (2) 15

Nellsar’s appeal - Ground 5 15

HMRC’s appeal 15

HMRC appeal – Grounds 1 and 2 15

Disposition 15

costs 15

APPENDIX 1 – FINANCIAL REPORTING STANDARDS MATERIAL: EXTRACTS FROM THE FTT DECISION (using paragraph numbering from the Decision) 15

APPENDIX 2 - RICS MATERIAL – EXTRACTS FROM THE FTT DECISION (using paragraph numbering from the Decision) 15

Appendix 3 - GN1 (2003) Trade-related valuations and goodwill (relevant extracts) 15