FTT allows capital allowances appeal

The FTT has released its decision in Perenco UK ltd v HMRC [2026] UKFTT 1096 (TC). The FTT held the taxpayer was entitled to claim first year capital allowances in relation to the disputed expenditure incurred as part of its acquisition of onshore oilfields and related field facilities, a proportion of which it subsequently sold.

The decision includes analysis of when a purpose should be tested for s.11 Capital Allowances Act 2001, as well as the application of the s.197 main purpose test in the context of a s.198 election, finding there was no main purpose of obtaining a tax advantage.

Jonathan Peacock KC and Sarah Black acted for Perenco UK Ltd. The decision can be found here.