In Inmarsat Global Ltd v HMRC [2022] EWCA Civ 1076 (28 July 2022) the Court of Appeal (CA) held that the company was not entitled to capital allowances in respect of expenditure incurred by its predecessor on launching satellites into space.
Inmarsat was the successor to the business of IMSO an international organisation established by a Convention to operate satellites for maritime communications. Six satellites were leased to IMSO by financial lessors and IMSO paid the costs of launching them into space. IMSO was exempt from corporation tax and so did not claim capital allowances in respect of the launch costs. Several years later Inmarsat acquired the business and assets of IMSO’s trade in return for the issue of shares and claimed capital allowances in respect of IMSO’s launch costs. It argued that by paying the launch costs IMSO had incurred capital expenditure on the provision of...
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