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I have long considered that the FTT’s analysis is the correct legal one. It is an interesting decision, but neverthelesss only persuasive. Regrettably, experience has shown that HMRC tends to ignore aspects of non-binding FTT decisions that it does not like.
The UT will soon be hearing a number of appeals relating to recent FTT capital allowances decisions. It will be interesting to see whether Glais House Care is added to this list. I suspect not, as the issue of symmetry has already been addressed by FA 2012.
One important point not mentioned in the article relates to moveable equipment (chattels). The FTT was not asked to rule on the capital allowances treatment of chattels, but ventured an opinion anyway (without submissions from Counsel) and got it completely wrong. There is no legal basis to restrict a buyer’s claim to a seller’s qualifying expenditure. A buyer’s claim for chattels is simply based on what it pays to buy the loose equipment (as long as that amount is fair and reasonable).
Incidentally, the shorthand of ‘embedded’ plant or machinery/ capital allowances, has no statutory or other official meaning. It was made up to sell capital allowances projects and is unecessary and ambiguous.
If an individual sought to procure moneys by knowingly distorting the truth or ingoring what it new to be the true position they would be banged up for fraud. Does this not apply to the HMTRC officer who sought to do the same?
Not only do they not get punished but they get a fat indexed linked pension for doing this sort of thing.
HMRC trying to limit the claim to £1 when that is not what the law says, was wrong.
Taxpayer seeking to ignore the seller's cost restriction was wrong.
Neither the taxpayer or HMRC come out of this one smelling of roses.
"HMRC applied The wrong version of the Law"?? really? Seems to me that the taxpayer chose not to understand the law that applied, and then selectively applied its own version because the result was likely to be better! This case highlights perfectly why HMRC introduced CAA 2001 s187A and if fewer advisers had prepared claims without proper reference to the applicable law, s187A might never have been necessary.