In Altrad Services Ltd and another v HMRC [2022] UKUT 185 (TCC) (12 July) the Upper Tribunal (UT) decided that the taxpayers were entitled to capital allowances even though these had been created by an artificial series of transactions with no business purpose reversing the First-tier Tribunal’s (FTT’s) decision that the arrangements were defeated by a Ramsay analysis.
The taxpayers (known as Cape and Wiseman at the FTT stage) had entered into arrangements that were designed to ‘step up’ the capital allowances to which they were entitled on assets that they already owned. In simplified terms the taxpayers sold the assets to a bank the bank leased the assets back to the taxpayers for three or four weeks and then the bank sold the assets back to the taxpayers. Under an anomaly in the legislation (that was subsequently corrected by FA 2011) the taxpayers contended that...