Perenco UK Limited v The Commissioners for HMRC
Decision date: 28 July 2026
Neutral citation: [2026] UKFTT 1096 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
Perenco UK Ltd appealed HMRC closure notices denying part of its 2011 first‑year capital allowances for Field Facilities sold shortly after acquisition. The FTT found PUK had incurred qualifying expenditure and obtained legal and equitable ownership on completion (14 Dec 2011), so s.11(4) and s.45F were satisfied and s.45G did not deny first‑year treatment; HMRC's contention that s.197 should override the s.198 election failed because retaining allowances was not a main purpose of the scheme. The appeal was allowed and the parties were directed to agree the correct foreign‑exchange basis.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The tribunal treated the relevant time for assessing s.11(4) as the point when the expenditure resulted in ownership (completion), not when payment obligations or deposits arose; legal and equitable ownership at that time suffices to meet s.11(4)(b) for qualifying expenditure, without any additional statutory requirement that the owner retain full economic risk or reward. On the facts, the s.198 election lawfully apportioned expenditure and was not displaced by s.197 because the main purpose of the scheme was not to obtain a tax advantage.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment observed that commercial practices which identify an earlier "economic date" or allocate commercial benefits/risks earlier do not backdate legal or beneficial ownership for tax‑qualification purposes; and that a s.198 election can legitimately be used for commercial apportionment even where it results in the seller retaining allowances, subject to statutory limits and potential s.197 scrutiny.