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P & J McCann (Toomebridge) Ltd (TC2619)
The taxpayer company was a sand merchant, extracting from Lough Neagh, Northern Ireland.
The firm had taken over a licence, originally granted in 1965, to extract the sand. A new permit was granted in 1993, and replaced by another in September 1998.
The taxpayer sold its business to another company in November 1998. HMRC assessed the taxpayer to corporation tax.
The firm appealed on the basis the licence was part of its goodwill and the chargeable gains computation should include credit for the value of the licence as at March 1982.
The First-tier Tribunal rejected the argument, holding that “the asset disposed of by the appellant in 1998 was the right to extract sand pursuant to the 1998 licence”.
The taxpayer’s appeal was dismissed.
