In Houston Cox Interiors Ltd v HMRC (TC00765 – 18 November) a company (H) acquired the business and assets of an associated company (E) in 2006. In its subsequent tax return H claimed relief for trading losses which E had incurred. HMRC rejected the claim on the basis that E’s relevant liabilities had exceeded its relevant assets and that H had not assumed legal responsibility for E’s liabilities so that the effect of what is now CTA 2010 s 945 was that H was not entitled to the relief claimed. H appealed contending that it had in fact transferred funds to E to allow it to pay its creditors. The First-Tier Tribunal dismissed the appeal observing that H had chosen to procure the discharge of E’s liabilities by making a loan which was recorded as an asset in H’s balance sheet. Judge Geraint Jones...
