Contract fell outside the ten-year period

The taxpayers were limited liability partnerships (LLPs) that acquired an assignment of rights under a construction contract relating to work to be undertaken at the Cobalt Business Park situated within an enterprise zone. Two data centres were built but efforts to find a tenant were unsuccessful. The LLPs claimed enterprise zone allowances (EZAs) (CAA 2001 s 299) on the expenditure incurred on the rights.

HMRC refused the claim. The taxpayers’ appeal to the First-tier Tribunal was dismissed so they appealed to the Upper Tribunal. It ruled that the LLPs had been entitled to EZAs in relation to part of the sums they had paid. HMRC appealed. The Upper Tribunal had also allowed the taxpayer’s claim for judicial review but there was no appeal against this.

The issue before the Court of Appeal was whether the taxpayers were entitled to EZAs. It held that that the LLPs had not been...