Tax tribunal: lead case appeals

Question

Accepted Answer

The tribunal can specify lead cases if there are a number of appeals which bring up common or related issues of fact or law. It will then stay the other appeals and put them on hold until it has reached a decision on the lead case or cases.

The tribunal can select an appeal to be made into a lead case under Rule 18 of the Tax Chamber procedure rules.

Simon Padfield and others

Date of direction

November 2018

Tribunal reference

TC/2017/08515

The appeals all concern the tax treatment of arrangements which are divided into two variants, namely (1) the Capital Gains Tac (鈥淐GT鈥�) variant, and (2) the Miscellaneous Income (鈥淢I鈥�) variant involving the following elements:

1 The participant entering on the same day into:
a. A forward purchase contract for the purchase of securities from a bank; and
b. A forward sale contract for the sale of securities by the participant to the bank.
2. The contracts contained identical triggers (linked to the level of the FTSE 100 Index) and provided for the delivery of securities on the same day. Although the price payable for the securities to be delivered under contract was set at the outset, the nature and value of the securities depended upon the trigger.
3. There were three possible outcomes, dependent upon the movement of the FTSE 100:
a. If the FTSE remained between the lower and the upper barrier, both the forward sale contract and forward purchase contract resulted in a small sale to the participant. The securities passing under both contracts were gilts.
b. If the FTSE moved below the lower barrier, one of the forward contracts (鈥渃ontract 1鈥�) produced a large loss, matched almost exactly by a gain on the other forward contract (鈥渃ontract 2鈥�).
c. If the FTSE moved above the upper barrier, contract 2 produced a large loss matched almost exactly by a gain on contract 1.
4. In the CGT variant of the arrangements, if the movement of the FTSE resulted in a loss with one of the contracts, it was settled by the delivery of the specified shares. If the result was a gain under the contract, it was settled by the delivery of gilts.
5. In the MI variant of the arrangements, if the movement of the FTSE resulted in a loss under one of the contracts, it was settled by delivery of certificates of deposit. If the result was a gain under a contract, it was settled by delivery of gilts.

Whether the separate identity of the contracts should be disregarded for CGT purposes and the TCGA applied to the overall economic outcome of the transactions (with the effect that there was no gain or allowable loss on the transactions) rather than separately to each contract.
Whether in the alternative, if the separate identity of the contracts should not be disregarded, they were entered into other than by way of a bargain at arm鈥檚 length for the purposes of s17 TCGA 92, with the effect that the chargeable gain or loss are calculated using the OMV of the relevant securities with the result that there was no gain or loss on the completion of the transactions, and
Further, and in any event, whether s16/a TCGA 92 operates to disallow any loss.
(Only in relation to certain appeals) whether in calculating the alleged loss for the purposes of the TCGA on the sale of the shares acquired under the forward purchase contract, the full amount paid for the shares was wholly and exclusively for the acquisition of the asset, or only that part representing the market value of the shares.

Whether the separate identity of the contracts should be disregarded and s152(1) ITA 2007 be applied to the overall economic outcome of the transactions (with the effect that there was no allowable loss on the transactions for the purposes of s152 ITA 2007) rather than separately to each contract; and
Whether, in the alternative, the Tribunal should read words into s152 ITA, as follows: 鈥淎 person may make a claim for loss relief against miscellaneous income if in a tax year (鈥渢he loss-making year鈥�) the person makes a real economic loss in any relevant transaction鈥� (emboldened words to be read in).

And if so whether in the circumstances of these appeals the participants did make no real economic loss as a result of the arrangements entered into such that there was no allowable loss for the purposes of s152 ITA 2007.

Wendy Hooper-Mitchell and others

(being members of the AML Partnership Benefit Trust group of cases)

Date of direction

May 2018

Tribunal reference

TC/2017/05888

1 Whether the sums described as 鈥渓oans鈥�, which were received from the trustee of the AML PCC Partners Benefit Trust by the appellant, as a result of his or her participation in the AML Partnership Benefit Trust arrangement, formed part of his or her trading income chargeable to income tax in the year at issue in his or her appeal.

2 Whether the fees paid to AML by each appellant for participation in the AML Partnership Benefit Trust arrangement were deductible from each appellant鈥檚 taxable income on the grounds that they were incurred wholly and exclusively for the purposes of his or her trade within the meaning of s34(1) Income Tax (Trading and Other Income) Act 2005 in the year at issue in his or her appeal.

Mark Dunsby and others

Date of direction

May 2018

Tribunal reference

TC/2017/04867

The appeals all concern the tax treatment of arrangements with the following elements:

1) The appellants were existing shareholders (鈥渢he Original Shareholders鈥�) of a company (the 鈥淐ompany鈥�);

2) The creation by the company of a new class of share 鈥淪鈥� ordinary share, and the allotment and issue of one S Class share to a non-UK resident individual who was not an Original Shareholder (鈥渢he Individual鈥�). The S Class share carried rights to participate in income profits and distributions as the board may recommend from time to time. It carried no voting rights and no rights to capital on winding up but had a right to the return of capital up to its nominal value.

3) The creation by the Individual of a trust for the benefit of, inter alia, the Original Shareholders (the 鈥淭rust鈥�). The terms of the Trust were such as to give certain beneficiaries including the Original shareholders, a right to the income of the Trust as it arose during an initial period. Thereafter the income of the Trust was to be paid to or applied for the benefit of the beneficiaries at the Trustees discretion. The property settled as trust by the Individual was the S Class share.

4) A declaration by the Company of a dividend on the S Class share held by the trustees of the Trust; and

5) A payment of the dividend to the beneficiaries of the Trust including the Original shareholders, as divided according to their respective interests.

Common issues of law or mixed fact and law

1) Whether the dividend declared and paid by the Company in regard of the S Class share held by the trustees of the Trust was a distribution made to the Original shareholder and taxable on them under s383 ITTOIA 2005;

2) Whether the Original Shareholder was a 鈥渟ettlor鈥� of a 鈥渟ettlement鈥� for the purposes of Chapter 5 of Part 5 of ITTOIA 2005;

3) Whether, if an Original Shareholder was a 鈥渟ettlor鈥� of a 鈥渟ettlement鈥� for the purposes of Chapter 5 of Part 5 of ITTOIA 2005:

a) Any income arising under the 鈥渟ettlement鈥� in question should be treated as income of the Original Shareholder under Chapter 5 of Part 5 of ITTOIA 2005 (applying s644 of ITTOIA or otherwise); and

b) If so, how much of that income should be treated as income of the Original Shareholder under Chapter 5 of Part 5 of ITTOIA 2005; and

4) Whether the Original Shareholder is taxable under the transfer of assets abroad provisions in Chapter 2 of Part 13 or ITA 2007, on the basis that the income of the Trust should be treated as arising to the Original Shareholder(s) under s720 and 721 ITA 2007.

Halcyon Films LLP & Micro Fusion 2005-1 LLP and others

Also known as the Mermaid and Triton appeals

Date of direction

January 2018

Tribunal reference

TC/2017/06507 & 6513

Common statements of fact

The Mermaid Lead Case, the Mermaid related cases, the Triton Lead Case and the Triton related cases (together 鈥渢he appeals鈥�) all relate to the Future PIRS Scheme implemented by Future Capital Partners (the 鈥淪cheme鈥�). Whether the Mermaid and Triton schemes are notifiable under the DOTAS regime has been the subject of separate judicial review proceedings.
The appeals arise in respect of 19 LLPs which originally invested in purported British qualifying films with expenditure purportedly incurred on acquisition or purported production expenditure having been claimed as a revenue deduction pursuant to the statutory film reliefs then applying (s42 FA (No 2) 92 and s48 FA (No 2) 98 and their re-enactment in the ITTOIA 2005), which are alleged to have given rise to purported partnership losses.
The Mermaid (implemented 2010/11) is a variant of the Scheme and the Triton (implemented 2011/12) is another variant of the Scheme.
The Mermaid and Triton variants of the Scheme involve purported acquisition by the appellants of film assets, with Plant and Machinery capital allowances being claimed by the 19 appellant LLPs in relation to the acquisition costs of those assets. In total, 6 of the appellant LLPs (all of which had originally allegedly undertaken Sale and Leaseback transactions) undertook the Mermaid iteration of the further leasing transaction, and 13 of the appellant LLPs (some of which were purportedly Sale and Leaseback, and some production partnerships) undertook the Triton iteration.
The finance structure of the Mermaid and Triton variants are the same in that lending is not by way of loan to the appellants, but rather the funds are loans to the designated members of the respective appellants and who then pass this to the appellants by way of capital introduced, purportedly wholly directly in the case of Triton or in the case of Mermaid partly via the participating members.
Whilst there are some minor differences between the Mermaid and Triton transactions (income arrangements, Studio counterparty, lease payment term etc.) the structure and effect of the transactions was substantially the same for all appellants, in that the appellants acquired further film assets, which were leased forward, with the appellants claiming Plant and Machinery capital allowances. The parties agreed that, as matters stand, there are no relevant or specific differing facts in the Mermaid related cases or the Triton related cases which currently warrant separate factual determinations by the Tribunal.

Whether expenditure was incurred by the appellants on Plant and Machinery as claimed.
Whether Plant and Machinery were used by the appellants for a qualifying activity, pursuant to s11 and s15 CAA 2001.
In respect of 鈥榯rade鈥�:
a. Whether the appellants were carrying on a qualifying activity of 鈥榯rade鈥� in the relevant tax years; or

b. If the appellants were not carrying on a 鈥榯rade鈥�, whether they were carrying on a qualifying activity of special leasing, both in respect of the original lease and in respect of a new lease; or

c. If the appellants were not carrying on a 鈥榯rade鈥�, whether capital allowances are due in respect of expenditure incurred on new leases and if so whether they can be set against income from special leasing chargeable to income tax from the original leases pursuant to s258 CAA 2001.

Mr Mark Johnson and others

Date of direction

30 October 2017

Tribunal reference

TC/2015/04175

Each Appellant established an interest in possession settlement in the Isle of Man, of which he is also the life tenant (鈥渢he Isle of Man Settlement鈥�). The Trustee of each Appellant鈥檚 settlement were not resident in the UK for tax purposes.
A partnership was established in the Isle of Man whose partners consist of the trustees of the Appellant鈥檚 settlement, together with the trustees of similar settlements (鈥渢he IoM Partnership鈥�).
The IoM Partnership entered into a contract with the Appellant (鈥渢he Services Agreement鈥�) under which the Appellant agreed to provide certain services for a fixed annual fee (鈥渢he Fixed Fee鈥�).

Issues of fact common to group A appellants before August 2007

For periods prior to August 2007 the Group A appellants satisfied their obligations by supplying their services to an umbrella company linked to De Graaf Resources Ltd (鈥渢he Umbrella Company鈥�). Work was found in some cases using a recruitment company (鈥渢he Recruitment Company鈥�).
The Umbrella Company entered into a contract with the IoM Partnership to on-supply the appellant鈥檚 services. Those services were then supplied to the UK resident end-client either directly by the Umbrella Company or via one or more intermediaries.
The end-client paid the Recruitment company/intermediary which in turn deducted its fee(s). The balance was paid to the IoM Partnership. The IoM Partnership deducted any costs and paid the remaining balance to the IoM Settlement.
PAYE was not deducted by the end-user clients or by the intermediaries, but was operated by the Umbrella Company upon the Fixed Fee.
The appellant included the Fixed Fee as employment income on this self-assessment (鈥淪A鈥�) tax returns; the money paid from the IoM Settlement was reported as the profits of an IoM Partnership.

Issues of fact common to i) group A appellants after August 2007 and ii) group B appellants

The appellants satisfied their obligations under the Services Agreement by supplying services via the IoM Partnership to a UK resident end-client.
The IoM Partnership entered into a contract with an intermediary in the UK to 鈥渙n-supply鈥� the appellant鈥檚 services. Those services were then supplied to the UK based end-client either directly by that intermediary or via one or more further intermediaries.
The end-client paid the intermediary or IoM Partnership for the services provided by the appellants without deducting PAYE. Where there was an intermediary it deducted its fee and paid the balance up the chain to the IoM Partnership. The IoM Partnership paid the Fixed Fee to the appellants and paid the balance (net of any costs) to the IoM Settlement.
No PAYE was operated on any part of the arrangements entered into.

Issues of law common to group A appellants before August 2007

The appellant had the right to the income of the IoM Settlement as it arose. That income was paid to the appellant in the UK without any UK or IoM tax having been deducted.
The appellant included the Fixed Fee as self employment income on his SA tax return; the money paid from the IoM settlement was reported as profits of an IoM Partnership.
Whether 1) the Fixed Fee; and/or 2) the money paid by the IoM Partnership to the IoM Settlement, and ultimately received by each appellant are earnings for the purposes of ITEPA 2003 s 62 and should have been subjected to PAYE.

Issues of law common to i) group A appellants after August 2007 and ii) group B appellants

Whether the appellants were within the agency rules set out at ITEPA s44 (or the earlier legislation, namely ICTA 88 s134), in all respects other than in relation to the test of 鈥渟upervision, direction or control鈥� contained in s44(1)(c) ITEPA.

Issues of Law common to all appellants

Whether any PAYE which should have been deducted is 鈥渢ax treated as deducted鈥� under TMA s59B and Reg 185 of the PAYE Regs.
Whether it is open to appellants to raise issues 15-17 above given the terms of their self-assessment returns.
Whether the words 鈥渁ny person entitled to a share of income of the firm鈥� in ITTOIA s858(4), introduced by FA 08 s58, did not apply to the appellants because they were entitled to a share of the partnership鈥檚 profits not the partnership鈥檚 income.
Whether a liability to Class IV NICs arises on the appellants.
Whether the matter in question, per s49D TMA 70, before the FTT on a proper construction of the closure notices encompasses the Group Appellants鈥� Ground One as described in the appeal.

Scoto Ltd

Date of direction

15 March 2016

Tribunal reference

TC/2012/09708

(1) Whether a debit that satisfies the requirements of s321 of the Corporation Tax Act 2009 (鈥榎u003cabbr title="Corporation Tax Act">CTA 2009鈥�) is to be brought into account without regard to the requirement in s307(3) of CTA 2009 that 鈥榯he credits and debits to be brought into account in respect of a company鈥檚 loan relationships are the amounts that, when taken together, fairly represent for the accounting period in question 鈥� (a) all profits and losses of the company that arise to it from its loan relationships and related transactions (excluding interest or expenses), (b) all interest under those relationships, and (c) all expenses incurred by the company under or for the purpose of those relationships and transactions鈥� or whether the requirement contained in s321(2) of CTA 2009 that it be brought into account 鈥榠n the same way as a 鈥� debit which is brought into account in determining the company鈥檚 profit or loss for the period in accordance with generally accepted accounting practice鈥� renders the debit subject to the requirement in s307(3) of CTA 2009.

(2) If s307(3) of CTA 2009 does apply, whether the debit arising to the subsidiary that enters into a Bonus Share Transaction is an amount which when taken together with any other credits and debits to be brought into account in respect of a company鈥檚 loan relationships, 鈥榝airly represents for the accounting period in question 鈥� all profits and losses of the company that arise to it from its loan relationships and related transactions鈥� within the meaning of s307(3) of CTA 2009.

(3) Alternatively, whether the debit arising to the subsidiary that enters into a Bonus Share Transaction is precluded from being brought into account by s465 CTA 2009 on the basis that it relates to an amount falling, when paid, to be treated as a distribution.

(4) Alternatively, whether the issue of bonus shares by the subsidiary to its parent company in a Bonus Share Transaction is a provision that falls within the scope of the transfer pricing rules in section 147 of the Taxation (International and other Provisions) Act 2010 or Schedule 28AA of the Income and Corporation Taxes Act 1988.

(5) If the transfer pricing rules do apply as set out in 3(5) above, whether the effect of those rules applying is that the bonus shares are regarded as issued for consideration equal to the value of the dividend payable in respect of those shares so reducing to nil the amount deductible under s321 of CTA 2009.

Cyclops Electronics Limited, David Mather Supplies Limited, Graceland Fixing Limited and Cabaret of the Angels Ltd

Date of direction

25 August 2015

Tribunal references

TC/2014/01035, TC/2014/01559, TC/2014/01832 and TC/2014/02010

Facts common to each lead case

(1) The facts common to each Lead Case are:

a. An individual (鈥榯he Employee鈥�) was an employee or director of a company (鈥榯he Employer鈥�);
b. The Employee incorporated, or acquired 鈥榦ff the shelf鈥�, a company (鈥楴ewCo鈥�);
c. The Employee became the sole shareholder and a director of NewCo;
d. NewCo鈥檚 authorised (but not issued) share capital included a class of preference shares (鈥榯he Preference Shares鈥�);
e. NewCo issued, and the Employer subscribed for, loan notes (鈥榯he Loan Notes鈥�) of 拢X, in denominations of 拢10;
f. The Employer transferred the Loan Notes to the Employee.

(2) The key common terms of the Loan Notes can be summarised as follows:

a. The redemption price was a sum equal to 拢10 for each 拢10 Loan Note (鈥榯he Redemption Price鈥�).
b. There were two redemption periods during which the holder of the Loan Note (鈥榯he Noteholder鈥�) could give notice to redeem some or all of the Loan Notes. The exact periods and notice requirements varied from case to case, but in general:

i. The 鈥楩irst Early Redemption Period鈥� began several weeks after the issue of the Loan Notes and lasted for several weeks. During this period the Noteholder could require redemption upon several days鈥� notice.

ii. The 鈥楽econd Early Redemption Period鈥� began immediately upon the issue of the Loan Notes and lasted for several months. If notice was given in the appropriate form during the Second Early Redemption Period then redemption was to take place several days after the expiry of the period.

c. The Loan Notes were immediately repayable at the Redemption Price at the option of the Noteholder, such option only to be exercised by the Noteholder giving notice in writing during the Second Early Redemption Period following the occurrence of certain specified events, including the passing of any resolution for the winding up or dissolution of NewCo.

d. In the event of the death of the Employee within 365 days of the date of the Loan Note instrument, all Loan Notes which had not been redeemed or converted were to be immediately re-registered with the Employer without compensation for the Noteholder at the date of death.

(3) In each of the Lead Cases, if and to the extent that the Loan Notes had not been redeemed during either the First Early Redemption Period or notice given during the Second Early Redemption Period, there followed a 鈥楥onversion Period鈥�. During this period NewCo had discretion to convert each 拢10 Loan Note into one 10p Preference Share issued fully paid with a share premium of 拢9.90.

Facts common to particular categories of lead case

(4) In some cases the Loan Notes had no fixed term and were expressed to be redeemable at any time at the absolute discretion of NewCo by payment of the Redemption Price. The relevant clause was generally numbered 2.7 and so this term of the Loan Notes is referred to as 鈥楥lause 2.7鈥�.

(5) In other cases the Loan Notes had a fixed redemption date so far as they had not been converted, cancelled or otherwise dealt with by agreement outside the terms of the Loan Notes prior to that date. These Loan Notes did not contain Clause 2.7.

(6) The steps taken after the transfer of the Loan Notes to the Employee varied from case to case.

a. In Cyclops Electronics Limited鈥檚 case, NewCo converted all the Loan Notes to Preference Shares.
b. In Cabaret of the Angels Limited鈥檚 case, the Employees redeemed a proportion of the Loan Notes, but not all. The steps taken in relation to the unredeemed Loan Notes vary. The Loan Notes did not contain Clause 2.7.
c. In Graceland Fixing Limited鈥檚 case, the Employees redeemed a proportion of the Loan Notes, but not all. The steps taken in relation to the unredeemed Loan Notes vary. The Loan Notes did contain Clause 2.7.
d. In David Mather Supplies Limited case, the Employee redeemed all the Loan Notes.

The common issues

(7) The first common issue (鈥榯he First Common Issue鈥�) is:

A. Is the Employer liable to income tax and Class 1 NICs as a result of the subscription for the Loan Notes and/or the transfer of the Loan Notes to the Employee, or do section 425(2), Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (鈥榎u003cabbr title="Income Tax (Earnings and Pensions) Act 2003">ITEPA鈥�) and Schedule 3 of the Social Security (Contributions) Regulations (SI 2001/1004) apply to prevent such a liability arising?

(8) The following common issues arise only to the extent that the Employer is not liable to income tax and Class 1 NICs as a result of the subscription for the Loan Notes and/or the transfer of the Loan Notes to the Employee by reason of the application of legislation specified in the First Common Issue:

B. In cases where there is a disposal of some or all of the Loan Notes on their redemption constituting a chargeable event under section 427(3)(c) ITEPA, how is the taxable amount determined for the purposes of section 426 ITEPA? In particular:

i. If the Loan Notes no longer exist immediately after their redemption how is 鈥楿MV鈥� to be determined?

ii. Does the value of the Loan Notes on acquisition constitute earnings from the employee鈥檚 employment under Chapter 1 of Part 3 ITEPA for the purposes of section 428(7)(b) ITEPA?

C. In cases where the Employee gave notice to redeem some or all of the Loan Notes and, on a date before the Redemption Price had been paid and the Loan Notes cancelled, pursuant to such notice NewCo resolved to redeem the Loan Notes:

i. At what point did the Loan Notes cease to be restricted securities in a manner which amounts to a chargeable event under section 427(3)(a) ITEPA?

ii. Did that event (the Loan Notes ceasing to be restricted securities) occur at a time before the Loan Notes ceased to exist?

D. In cases where the Employee redeemed some or all of the Loan Notes, does Chapter 3C of Part 7 apply on the redemption?

i. If Chapter 3C of Part 7 does apply, does the value of the Loan Notes on acquisition constitute earnings from the employee鈥檚 employment under Chapter 1 of Part 3 ITEPA for the purposes of section 446T(3)(b) ITEPA?

ii. If Chapter 3C of Part 7 does apply, how is the amount which counts as employment income to be determined?

E. In cases where the Employee redeemed some or all of the Loan Notes:

i. Is the receipt of the Redemption Price a benefit received within the definition of section 447 ITEPA?

ii. If yes, is the amount received on redemption the taxable amount under section 448?

F. In cases where the Employee converted some or all of the Loan Notes into preference shares:

i. Is any increase in value of the Employee鈥檚 ordinary shares in NewCo as a result of the conversion a benefit received within the definition of section 447 ITEPA?
ii. If yes, is that increase in value the taxable amount under section 448?

Berkshire Golf Club, Glen Golf Club and Wilmslow Golf Club

Date of direction

16 May 2015

Tribunal references

TC/2009/11716, TC/2012/07487, TC/2009/11023, TC/2012/10291, TC/2009/11597 and TC/2012/09070

(1) Whether the economic evidence contained in the reports prepared by Professor Stefan Szymanski dated 23 December 2014 and 20 March 2015 and relied upon by the respondent demonstrate that on the balance of probabilities the appellants will be unjustly enriched if the whole or part of the sums claimed are repaid.

(2) If the respondents economic evidence does establish that the appellants will be unjustly enriched what percentage restriction should be applied to each of the appellants鈥� claims.

(3) Whether supplies of Green Fees by the appellants which are on-supplied to individuals by tour operators are exempt or subject to VAT at the standard rate.

(4) Whether, if the customer of the appellant is a body corporate, there is a distinction between a 鈥榗orporate day鈥� package (which all parties accept is taxable) and the supply of access to play golf.

(5) Which categories of course maintenance costs are properly treated as residual in each of the following circumstances:

a. The club provides advertising services from locations on the golf course but has no corporate day income;
b. The club has neither corporate day income nor course advertising income; and
c. The club has taxable income from the hire of other golfing equipment, including but not limited to golf buggies, trolleys or clubs.

(6) Whether the link between course maintenance costs and taxable tee advertising, corporate day or rental income is sufficiently direct and immediate to give rise to at least partial input tax and whether this depends on the category of cost incurred and is the tribunal able to identify, on the evidence before it, which categories do give rise to a sufficiently direct and immediate link.

Mrs Louise White

Date of direction

15 January 2015

Tribunal reference

TC/2011/4165

a. Is Drummond v HMRC [2009] EWCA Civ 608 (鈥楧rummond鈥�) determinative of the whole or part of these appeals?

b. To the extent that Drummond is not determinative of these appeals, following the surrender of the second hand insurance policy (鈥榎u003cabbr title="Second hand insurance policy">SHIP鈥�) what amounts (if any) are to be excluded from the surrender proceeds received by the taxpayer, by virtue of section 37(1) Taxation of Chargeable Gains Act 1992?

c. To the extent that Drummond is not determinative of these appeals, following the surrender of the SHIP what amounts (if any) are to be deducted from the surrender proceeds received by the taxpayer, by virtue of section 38(1) Taxation of Chargeable Gains Act 1992?

d. Whether, absent the amendments to section 210 Taxation of Chargeable Gains Act 1992 made by the Finance Act 2003, the combined effect of sections 210 and 37 Taxation of Chargeable Gains Act 1992 was to permit the generation of allowable losses?

Stagecoach Group plc

Date of direction

8 October 2014

Tribunal reference

TC/2013/07413

(1) Whether the deductability of debits under section 320 Corporation Tax Act 2009 (CTA 2009) is subject to the provisions of section 307(3) CTA 2009 (鈥業ssue a鈥�);

(2) If so, whether section 307(3) CTA 2009 requires the debits and credits to be tested to establish their nature (鈥業ssue b鈥�);

(3) If so, the issue of whether the debits claimed by the appellants fairly represent losses arising from their respective loan relationships under section 307 CTA 2009 (鈥業ssue c鈥�);

(4) Whether there is an amount to be bought into account under the relevant provisions of the Taxation (International and Other Provisions) Act 2010 (TIOPA 2010), and in particular whether the receipt scheme conditions in section 250 TIOPA 2010 were satisfied (鈥業ssue d鈥�);

(5) Whether, under section 254(1)(b) TIOPA 2010, each of the receipt scheme conditions has to be met in relation to the company at the time the notice is given, so that notices given after the 鈥榮chemes鈥� have been completed are invalid (鈥業ssue e鈥�);

(6) Whether there could be a charge to tax under Case VI of Schedule D in the relevant periods, as stated in HMRC鈥檚 closure notices (鈥業ssue f鈥�).

Paul Wilson

Date of direction

28 August 2014

Tribunal reference

TC/2013/02022

(1) In the light of the decision of the Supreme Court in Tower MCashback v Commissioners for HM Revenue & Customs [2011] UKSC 19, were the arrangements in place pursuant to which the Appellants purported to acquire a software licence in the Vismail computer software system in 2006-07 such that the Appellants 鈥榠ncurred鈥� expenditure on the provision of plant and machinery for capital allowances purposes?

(2) Were the said arrangements such that the sole or main benefit that might be expected to accrue to the Appellants was to obtain capital allowances so as to restrict or eliminate the capital allowances claimed by virtue of section 215 Capital Allowances Act 2001?

(3) In the light of those issues, to what extent if at all are the Appellants entitled to capital allowances in 2006-07 and subsequent tax years?

Shanklin and Unionist Club

Date of direction

29 May 2014

Tribunal reference

TC/2013/7347

(1) Whether a 鈥楥onservative Club鈥� provides facilities to enable its members to engage in political activity?

(2) If so, should that be reflected in an apportionment of the membership subscriptions for VAT purposes?

OCCO Ltd

Date of direction

22 May 2014

Tribunal reference

TC/2012/04959

In particular, the appointment of assets to a sub-trust of the Employee Benefit Trust (EBT) does not give rise to PAYE or National Insurance contributions.

Funds contributed to the EBT did not fall within the meaning of 鈥榚mployee benefit contribution鈥� for the purposes of paragraph 1(2) of Schedule 24 to Finance Act 2003 and as a consequence relief for corporation tax purposes is not denied by schedule 24 to Finance Act 2003.

Funds contributed to the EBT, and the legal and professional fees incurred in the 鈥榓rrangement鈥�, were incurred wholly and exclusively for the purposes of the appellant鈥檚 trade and were revenue in nature.

Section 43 of Finance Act 1989 does not operate to deny a deduction in respect of the contribution to the EBT.

Mr Nicholas Trigg

Date of direction

22 May 2014

Tribunal reference

TC/2014/2575

Under a joint reference under section 28ZA of the Taxes Management Act 1970, in determining whether Bonds are qualifying Bonds, does the inclusion in the Bonds (at the time of their issue) of a clause in the form set out in Schedule A or B to the Joint Reference prevent the Bonds from being qualifying corporate bonds by virtue of section 117(1)(b) of the Taxation of Chargeable Gains Act 1992?

Davison & Robinson Ltd

Date of direction

22 May 2014

Tribunal reference

TC/2014/03246

Whether only one excise duty point can arise in respect of specific goods; in particular is it open to HMRC to assess to excise duty a person who is found to be holding excise goods which cannot be shown to be duty paid and in respect of which there must have been an earlier release for consumption, unless that earlier duty point can be identified and assessed?

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