Centrica Overseas Holdings Limited v The Commissioners for HM Revenue and Customs [2021] UKUT 0200 (TCC)
| Jurisdiction | UK Non-devolved |
| Judge | Mr Justice Fancourt,Judge Jonathan Cannan |
| Neutral Citation | [2021] UKUT 0200 (TCC) |
| Subject Matter | 18 August 2021 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Published date | 26 August 2021 |
[2021] UKUT 0200 (TCC)
UPPER TRIBUNAL
(TAX AND CHANCERY CHAMBER)
Appeal number: UT-2020-000355
BETWEEN
CENTRICA OVERSEAS HOLDINGS LIMITED
Appellant
-and-
THE COMMISSIONERS FOR
HER MAJESTY’S REVENUE AND CUSTOMS
Respondents
TRIBUNAL:
MR JUSTICE FANCOURT
JUDGE JONATHAN CANNAN
Sitting in public by way of video hearing treated as taking place in London on 17 – 19
May 2021
James Rivett QC and Ronan Magee instructed by Pinsent Masons for the Appellant
James Henderson and Barbara Belgrano instructed by the General Counsel and Solicitor
to HM Revenue and Customs for the Respondents
CORPORATION TAX – s1219 Corporation Tax Act 2009 – company with investment business
– expenditure in connection with disposal of assets – whether expenses of management of the
company’s investment business – whether expenditure was capital in nature
1
DECISION
INTRODUCTION
1. This is an appeal against a decision of the First-tier Tribunal (“the FTT”) released on 23
April 2020 (“the Decision”). The FTT dismissed the appellant’s appeal against a decision of
the respondents that it was not entitled to claim relief for corporation tax purposes for certain
expenditure which it claimed was expenses of management of its investment business. We shall
refer to the appellant as “COHL” and the respondents as “HMRC”. The FTT gave permission
to appeal in a decision dated 22 July 2020.
2. COHL is an intermediate holding company in the Centrica Plc group of companies. At
all material times it owned 100% of the share capital of Oxxio BV (“Oxxio”), a Dutch holding
company which itself had four subsidiaries registered in the Netherlands. Assets of two of those
subsidiaries and the shares in a third subsidiary were sold to a company called Eneco Group
NV (“Eneco”) in a deal which was completed in March 2011. Professional fees were paid in
connection with the transaction relating to services from Deutsche Bank AG London
(“Deutsche Bank”), Pricewaterhouse Coopers (“PwC”) and De Brauw Blackstone Westbroek
(“De Brauw”) over the period from July 2009 to March 2011. The fees which COHL claims
are expenses of management of its investment business totalled some £2.5m (“the Disputed
Expenditure”) and COHL claimed relief in its company tax return for the period ending 31
December 2011.
3. COHL’s claim for relief was made pursuant to s1219 Corporation Tax Act 2009 (“CTA
2009”) which provides so far as relevant as follows:
(1) In calculating the corporation tax to which a company with investment
business is liable for an accounting period, expenses of management
of the company's investment business which are referable to that
period are allowed as a deduction from the company's total profits.
(1A) …
(2) For the purposes of this section expenses of management are expenses
of management of a company's investment business so far as —
(a) they are in respect of so much of the company's investment
business as consists of making investments, and
(b) the investments concerned are not held for an unallowable
purpose during the accounting period to which the expenses
are referable.
(3) But —
(a) no deduction is allowed under this section for expenses of a
capital nature, and
(b) …
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