Jurisdiction(s):
United Kingdom

FTT (Tax) upholds degrouping charge: goodwill not transferred; Currys Retail v HMRC on nature and assignability of goodwill and that tax-motivated disposals can avoid TCGA 1992 s179 charge

Published on: 21 July 2025

Published by a LexisNexis Tax expert

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Article summary

Currys Retail Ltd v HMRC [2025] UKFTT 762 (TC)

Between 2004 and 2007, the taxpayer—previously named The Carphone Warehouse Ltd (CPW)—took over the businesses (the Businesses) together with the associated goodwill (Goodwill) of four companies operating within the same chargeable gains group. Although the aggregate value of the Goodwill was around £108m, TCGA 1992, s 171 applied so that these transfers did not trigger a tax charge. In 2008, as part of a joint venture arrangement with the Best Buy group, CPW exited membership of the chargeable gains group. Where a company departs a chargeable gains group holding an asset (other than a trading asset) that it acquired from another company in that group within the previous six years, TCGA 1992, s 179(3) treats the company as having disposed of, and immediately reacquired, that asset at the market value prevailing at the time of the intra‑group acquisition. By 2008, however, the value of the Goodwill had fallen to about £50.8m. Consequently, the degrouping charge would result in CPW becoming liable to corporation tax on value which no longer existed...

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