Greenbank Holidays Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 8 March 2010
Neutral citation: [2010] UKFTT 109 (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
Greenbank Holidays bought Keyline’s camping business in September 2003 and recorded substantial goodwill, then claimed tax relief under Schedule 29 (Finance Act 2002). The tribunal held that Schedule 29’s term “goodwill” adopts the accounting meaning and therefore covers both purchased and internally generated goodwill, but the goodwill in this case was not created by Greenbank after the 1 April 2002 commencement date — it was internally generated by Keyline before commencement. The appeal was dismissed and HMRC’s denial of the paragraph 10 deduction was upheld.
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
Where Schedule 29 adopts accounting meanings, “goodwill” should be read to include both purchased and internally generated goodwill as understood under GAAP/FRS10; however, internally generated goodwill that existed by virtue of a business carried on before the commencement date is treated as created before commencement for Schedule 29 purposes and so is not eligible for the post‑commencement relief.
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 observed (by reference to FRS10 and related company law/EC Directive implementation) that accounting rules distinguish purchased goodwill (capitalisable) from internally generated goodwill (not capitalisable) while recognising a general concept of goodwill embracing both types; the judgment also notes later legislative amendments on related issues, but these remarks were not relied on for the decision.