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CRC v Halcyon Films LLP, Court of Appeal
The taxpayer company acquired feature films from film distributors and leased them back. In its tax return for 2003/04, it claimed a loss of more than £14 million, principally under F(No 2)A 1992, s 42.
Following an enquiry, HMRC refused the claim. The taxpayer appealed. The Special Commissioners heard the appeal in conjunction with one from Micro Fusion 2004-I LLP, and allowed both appeals.
The High Court dismissed HMRC’s subsequent appeal in respect of Halcyon, so they appealed to the Court of Appeal.
The Court of Appeal ruled that acquisition expenditure that would have fallen under F(No 2)A 1997, s 48 but for FA 2002, s 101, could continue to qualify for relief under F(No 2)A 1992, s 42.
HMRC’s appeal was dismissed.
