FTC/47 & 50/2012 - HMRC - and - Sir Fraser Morrison
| Jurisdiction | UK Non-devolved |
| Judge | LORD GLENNIE |
| Judgment Date | 11 October 2013 |
| Neutral Citation | [2013] UKUT 0497 (TCC) |
| Respondent | SIR ALEXANDER FRASER MORRISON |
| Appellant | THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Appeal Number | FTC/50/2012 |
[2013] UKUT 0497 (TCC)
Appeal numbers: FTC/47/2012 &
FTC/50/2012
CGT – s.49 TCGA 1992 – contingent liability – capacity – representation
made of a disposal – costs as a contingent liability
UPPER TRIBUNAL
(TAX AND CHANCERY CHAMBER)
ON APPEAL FROM THE
FIRST-TIER TRIBUNAL (TAX CHAMBER)
THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS
Appellants
v.
SIR ALEXANDER FRASER MORRISON Respondent
TRIBUNAL: LORD GLENNIE
Sitting in public at George House, 126 George Street, Edinburgh on 9 September
2013
Mr Iain Artis, Advocate, instructed by the Office of the Advocate General for
Scotland, for the Appellant (HMRC)
Mr Julian Ghosh QC and Ms Elizabeth Wilson, counsel, instructed by Ernst &
Young LLP for the Respondent (Sir Alexander Fraser Morrison)
DECISION
LORD GLENNIE
Introduction
[1] There are two issues in dispute in this appeal from the First-tier Tribunal
(“FTT”).
[2] The first, in respect of which HMRC are the appellants, is whether a payment
of £12 million made by Sir Fraser Morrison (“SFM”) to settle an action arising out of
representations made or allegedly made by him with respect to Morrison plc
(“MPLC”) in connection with an offer for the purchase of the company by Anglian
Water plc (later renamed AWG Group Limited) (“AWG”) was a “contingent liability
in respect of a … representation made on a disposal by way of sale of [SFM’s shares
in MPLC]” within the meaning of section 49(1)(c) of the Taxation of Chargeable
Gains Act 1992 (“the Act”), requiring an adjustment to be made in terms of section
49(2) thereof.
[3] The second issue, on which SFM is the appellant, is whether SFM’s costs of
defending that action (amounting to over £5 million) were themselves also such a
contingent liability within the meaning of section 49(1)(c), requiring an adjustment in
terms of section 49(2).
[4] The FTT decided the first issue in favour of SFM in principle, though it
stopped short of holding that the whole payment of £12 million fell within section
49(1)(c). HMRC appeal against that decision with leave of the FTT. In the course of
argument, as foreshadowed in his skeleton argument, SFM submitted that the FTT
should have gone further and decided that the whole payment of £12 million fell
within the section. Objection was taken to this submission on the ground that SFM
had not obtained leave to appeal on this point. On a very narrow view there might be
something to be said for this objection, but on balance I consider that, once the FTT
granted HMRC leave to appeal on the first issue, it opened up this ancillary point too.
Accordingly, I shall consider the point on its merits. Had it been necessary to do so, I
would myself have granted leave to argue this point as part of this appeal.
[5] The FTT decided the second issue in favour of HMRC. SFM appeals against
that decision with leave of the FTT.
Outline facts
[6] The following facts were among those agreed between the parties in a
Statement of Agreed Issues and Facts. I only recite those which appear to me to be of
direct relevance to the issues in the appeal.
AWG’s acquisition of MPLC
2
To continue reading
Request your trial