It’s my tax relief

The claimant business Drachs Investments entered into a sale-and-purchase agreement with the defendant firm Brightsea. The deal saw the latter party buying the entire share capital of two companies.

Brightsea also acquired several subsidiary companies that had formed part of a group of which Drachs was the parent. The subsidiary companies were transferred at their net asset value according to a consolidated balance sheet which included provision for liability to corporation tax.

The arrangement included warranties that the companies could not make or recover payment for group relief other than had already been agreed.

It subsequently transpired that as a result of loss relief one of the subsidiary companies transferred to Brightsea was due a repayment of corporation tax which had not been accounted for when calculating the net asset value.

The claimant company sought to have the tax relief transferred to...