R (oao Cobalt Data Centre 2 LLP and another) v HMRC

In R (oao Cobalt Data Centre 2 LLP and another) v HMRC [2024] UKSC 40 (20 November) the Supreme Court (SC) dismissed the taxpayers’ appeal holding that the two LLPs were not entitled to 100% enterprise zone allowances in respect of the construction of two data centres.

Two SPVs were formed to develop land in an enterprise zone. One (the developer) held a lease of part of the site and the other (the contractor) was to carry out the building works. The day before the ten-year period for the enterprise zone expired they entered a ‘golden contract’ with the intention of enabling allowances to be claimed on buildings constructed in the following ten years while retaining flexibility on the type of development. The contract therefore allowed for a choice of different developments (‘works options’) each linked to a specific part of...