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Scottish Widows plc v CRC, Supreme Court
The taxpayer life assurance company claimed substantial losses. HMRC enquired into its returns and decided that amounts the company had described as 'transfers from capital reserve' had not been taken into account in the profits and loss computation.
The case was referred to the Special Commissioners, who agreed with the Revenue that the effect of FA 1989, s 83 was that 'transfers from capital reserve' had to be taken into account as receipts in computing the loss.
Both sides appealed to the Supreme Court, which ruled that, on the proper construction of s 83(2), the amounts to be taken into account as receipts for the computation were those shown in line 15 of form 40.
The company’s appeal, and HMRC’s cross appeal were dismissed.
