Milton Park Holdings Ltd & Anor v The Commissioners for HMRC
Decision date: 14 November 2025
Neutral citation: [2025] UKFTT 1353 (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
This appeal concerned whether MPHL acquired a business such that purchased goodwill could be recognised in its accounts and thereby give rise to corporation tax deductions; HMRC had disallowed goodwill amortisation and related group relief. The Tribunal found that although MPHL obtained control of the net assets, it did not acquire control of the operations or retain the risks and rewards of the care‑home business (which passed to MCP), so MPHL was not entitled to recognise purchased goodwill. The appeals were dismissed and HMRC’s closure‑notice treatment stands.
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
Under the applicable UK GAAP (FRSSE/FRS 5/6 as agreed by the parties), recognition of purchased goodwill requires not only legal acquisition of net assets but also acquisition of control of the operations and the associated risks and rewards; legal form alone cannot defeat a substance‑over‑form assessment. Because MPHL lacked operational control and did not retain the economic benefits of the business, purchased goodwill should not have been recognised.
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 noted (obiter) that reliance on international standards (IFRS 3/FRED 36) is misplaced where mandatory UK GAAP governs the accounting issue, and that informal family understandings or de facto personal control do not substitute for objective evidence of an entity’s ability to direct financial and operating policies for GAAP purposes.