Recent Court Decision: Prizedome Ltd & Anor v Revenue & Customs [2009] EWCA Civ 177: HMRC Victory

March 18th 2009

In this case the dispute was regarding ring-fencing of capital losses brought into a group and in particular when a company joins group 1 which is then taken over by group 2.In this brief judgment the Court provides a close analysis of Para 1 (6) Sch 7A TCGA 1992.

If Prizedome were right, the losses of a company before entering group 1 could not be offset but would be available once the group 2 takeover occurred. Lord Justice Mummery said:  

“This makes no sense and cannot have been intended by Parliament. Like the judge, I would uphold such a construction only if compelled to do so by the language of the statute. For the reasons that I have given, far from compelling this construction the language of the statute points the other way.”

As this was a unanimous Court of Appeal decision and upholding the High Court decision it would be surprising if Prizedome got leave to go to the House of Lords.