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Daimler-Chrysler UK operated the Mercedes-Benz dealer network in the UK and had agreements with a number of dealers including the taxpayer.
In 2000 Daimler-Chrysler decided it wished to terminate all dealer agreements on 12 months' notice. The taxpayer challenged the move and in July 2001 an agreement was reached for termination on a little under 24 months' notice.
The agreement entitled the taxpayer to an enhanced two-year territory release payment (TRP). It then entered into a transfer accord with the party known as L under which L paid the TRP as well as a sum to cover the assets of the business.
In its tax return the taxpayer treated the whole transfer consideration paid by L as relating to goodwill and claimed rollover relief on the whole amount.
The Revenue argued that half of the payment was for goodwill and...
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