Contract was 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 appealed and also applied for judicial review. The appeal and the judicial review claim were transferred to the Upper Tribunal to be heard together. It found for the taxpayers but the Court of Appeal allowed HMRC’s appeal and the taxpayers appealed.

The Supreme Court held that s 298(1)(b) allows capital allowances under the EZA regime to be claimed for expenditure only where on the tenth anniversary of the site being included in the enterprise zone...