FTT Applies Ramsay to CAA 2001 Hire-purchase and Funding Lease Regime

“The First-tier Tribunal has handed down its decision in Cape Industrial Services Ltd and Robert Wiseman and Sons Ltd v HMRC. The FTT applied the Ramsay jurisprudence to hold that the taxpayers did not “cease to own” plant and machinery for the purposes of CAA 2001 where they had sold the plant and machinery to a third party, rented it back from the purchaser, and ultimately were required to repurchase it under put options that had been granted to the original purchaser.

Absent the application of Ramsay the FTT held that the taxpayers would have been entitled to additional writing-down allowances in respect of the assets as a result of their sale, leaseback, and repurchase.

Jonathan Peacock QC and Edward Hellier appeared on behalf of Cape Industrial Services Ltd and Robert Wiseman and Sons Ltd.”

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