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Lloyds TSB Equipment Leasing (No 1) Ltd (TC1745)
The taxpayer company claimed capital allowances at 25% on two ships built to carry liquefied natural gas from Norway to Spain and the USA.
HMRC refused the claim on the basis it did not meet the conditions in CAA 2001, s 123.
The essence of the First-tier Tribunal’s decision, which was lengthy and complex, was that although the taxpayer company had taken steps to improve its chances of obtaining the capital allowances on the vessels, it was not the main object.
The transactions were not tax motivated.
The taxpayer’s appeal was allowed.
