The appellant, Redevco Properties UK Limited, ceased to be a UK resident for corporation tax purposes on 15 January 2008, when it became a resident in the Netherlands.

When it relocated, Redevco, which was owned by Cofra Holdings, the holding company behind collapsed fashion chain C&A, was deemed to have disposed of its assets and re-acquired them at market value. This resulted in a taxable gain of £139,700,000 under s185 of the Taxation of Chargeable Gains Act 1992 (TCGA).

It then immediately re-acquired the assets for the same amount, which gave rise to profits for corporation tax purposes of £2,700,114.

HMRC contended that it was possible to apply a ‘conforming construction’ to the UK legislation to provide for payment of the tax over a five-year period.

I