Commentary

I2.209 Tower MCashback Llp

IHT, trusts and estates

I2.209 Tower MCashback Llp

I2.209 Tower MCashback Llp

The Supreme Court reconsidered the Ramsay principle in 2011 in HMRC v Tower MCashback Llp 11. Two limited liability partnerships had claimed capital allowances in respect of capital expenditure on computer software. 75% of the purchase price of the software was funded by 'non-recourse loans', which were indirectly made available by the vendor of the software. HMRC initially rejected the claims on the grounds that the expenditure had been incurred 'with a view to granting to another person a right to use or otherwise deal with any of the software in question', within CAA 2001, s 45(4). They issued closure notices, against which the partnerships appealed. At the hearing of the appeals, HMRC abandoned their original contention with regard to s 45(4), but defended the closure notices on alternative grounds. The Supreme Court held that, on the facts found by the Special Commissioner, the partnerships were only entitled to 25% of the allowances which they had claimed, applying the 1992 decision in Ensign Tankers (Leasing) Ltd v Stokes2, and distinguishing the 2004 decision in Mawson v Barclays Mercantile Business Finance Ltd (see I2.208 above). The case was heard by seven Supreme Court judges, rather than the

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