Morgan Lloyd Trustees Limited & Ors v The Commissioners for HMRC
Decision date: 31 March 2023
Neutral citation: [2023] UKFTT 355 (TC)
Overall AI summary confidence: medium
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: medium
This case concerns appeals against HMRC assessments arising from pension‑funding transactions secured on IP (software, trademarks, domain names, websites, databases). The Tribunal determined what assets the contracts actually conveyed (notably that “domain name” meant the domain name only), evaluated valuation methodologies and market‑value tests under s.179/s.180 FA 2004 (upholding some HMRC assessments and rejecting some valuation challenges), and rejected s.268 relief for MLT where trustees did not reasonably believe payments were not scheme‑chargeable or applications were late. Outcomes: HMRC assessments were upheld for Ballards, Gannon and Langford; VAT was treated as recoverable (so sale/leaseback amounts were VAT‑exclusive) in Criticall, Gannon and Prisym; several s.268/s.267 applications were disallowed as late or unreasonable.
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
Clear contractual language is to be given its ordinary meaning — where documents referred to a “domain name” the Tribunal treated the asset as the domain name only, not the website. Valuation for s.179/s.180 must be tested against real‑market assumptions and a hypothetical willing buyer/seller; speculative internal forecasts or inappropriate comparables do not satisfy the market‑value test. For s.268(7) relief, trustees must hold a reasonable belief, grounded in proper commercial analysis; mere uncritical reliance on advisers or valuers is insufficient.
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 Tribunal criticised MLT’s procedural shortcomings (e.g. incomplete checklists, rapid sign‑offs) as relevant to reasonableness enquiries, suggested that highly personalised or easily recreated IP may warrant a cost‑based approach when market demand is negligible, and noted that repayment of funding reduces risk but cannot cure non‑compliance with statutory tests at the time of transaction. These comments are illustrative rather than binding.