Visit JCPCUKSC/2022/0174
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TAX
R (on the application of Cobalt Data Centre 2 LLP and another) (Appellants) v Commissioners for His Majesty's Revenue and Customs (Respondent)
Case summary
Case ID
UKSC/2022/0174
Parties
Appellant(s)
Cobalt Data Centre 2 LLP
Cobalt Data C
Respondent(s)
Commissioners for His Majesty's Revenue and Customs
Issue
Does section 298(1)(b) of the Capital Allowances Act 2001 (“the 2001 Act”) entitle the appellants to initial 100% capital allowances for expenditure they incurred in the construction of data centres in an enterprise zone?
Facts
In 2011, the appellants, Cobalt Data Centre 2 LLP and Cobalt Data Centre 3 LLP ("the taxpayers"), purchased the benefit of a contract for the construction of buildings within an enterprise zone (the "Golden Contract"). The Golden Contract had been entered into in 2006 between a developer and a contractor, and the buildings were completed in 2012. Section 298(1) of the 2001 Act which provides that the time limit for expenditure on the construction of a building is “(a) 10 years after the site was first included in the zone, or (b) if the expenditure is incurred under a contract entered into within those 10 years, 20 years after the site was first included in the zone”. The taxpayers claimed that the requirements of section 298(1)(b) of the 2001 Act were met and therefore the whole of the price they had paid to acquire the benefit of the Golden Contract qualified for enterprise zone capital allowances ("EZAs"). The Respondent (“HMRC”) rejected their application, finding that the requirements of section 298(1)(b) had not been met and so no EZAs were payable. The Upper Tribunal ("UT") disagreed, holding that the requirements of section 298(1)(b) had been met. However, in a separate decision on quantum, the UT allowed the taxpayers only around half of the EZAs they had sought. HMRC appealed and the LLPs cross-appealed in relation to quantum. The Court of Appeal ("CA") allowed HMRC's appeal and adjourned the taxpayers’ cross-appeal pending the outcome of the LLPs' proposed appeal to the Supreme Court. The taxpayers now appeal to the Supreme Court.
Date of issue
25 November 2022
Judgment appealed
Judgment details
Judgment date
20 November 2024
Neutral citation
[2024] UKSC 40
Judgment links
Judgment summary
20 November 2024
Appeal
Justices
Hearing dates
Full hearing
Start date
24 January 2024
End date
25 January 2024
Watch hearings
24 January 2024 - Morning session
24 January 2024 - Afternoon session
25 January 2024 - Morning session
25 January 2024 - Afternoon session
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Change log
Last updated 16 April 2024