Farnborough Airport Properties Co v HMRC: Statutory Interpretation and the "Interstices" of Administrative Law
![handle is hein.journals/britaxrv2020 and id is 636 raw text is: 620 British Tax Review
Like the Netherlands, Ireland has shown that the Commission's decisions in relation to tax
rulings are vulnerable to detailed scrutiny. The Commission will not want another Member State
to do the same. One consequence of this judgment, therefore, is to increase significantly the
importance of Luxembourg's forthcoming appeal.6 The Commission will be hoping the result
of that appeal does not make more adverse headlines. Were it to do so, the stakes in the appeal
which has now been commenced in relation to Ireland would be increased considerably.
Timothy Lyons
Farnborough Airport Properties Co v HMRC: statutory interpretation and
the interstices of administrative law
A company in standard-form receivership cannot, by group relief, surrender its trading losses to
another company.' Put starkly, that is what the Court of Appeal has decided in Farnborough
Airport Properties Co v HMRC (Farnborough (CA)).' The Court has thereby turned an unflinching
gaze on the nature and purpose both of the relief and of the legislation creating it. The decision
contains crucial lessons for statutory interpretation. In doing so, it underlines the public law
nature of tax legislation, something that practitioners should recognise and ruminate on.
The commercial value of a successful group relief claim' highlights both the misnomer the
relief implies and also its counter-intuitiveness. Counter-intuitively, whilst a loss on a company's
ordinary activities is a burden on its business, a trading loss is most definitely a benefit for its
corporation tax liability. The misnomer arises from the fact that a group, for group relief, is
conceptually different from a chargeable gains group or from a group comprised in a VAT group
registration.' With each of these, in some contexts, appropriately-related companies are treated
as a single tax subject.! Group relief, however, does not concern itself with groups as such but
specifically with the relationship between legally-separate tax subjects, namely, a company and
its 75 per cent subsidiaries. This case concerned the impact of the appointment of Law of Property
16 See Ireland v Commission (C-898/19 P) and Fiat Chrysler Finance Europe v Commission (C-885/19 P).
Advance rulings; Competence; Corporation tax; EU law; Ireland; Non-resident companies; OECD; State aid;
Transfer pricing
QC, Barrister, 39 Essex Chambers.
'The writer has benefited from conversations with Philip Ridgway, who alerted him to the case, and (in emails) with
Hans Gribnau. The views here expressed are, however, the writer's own. The writer thanks Michael Blackwell and
Dominic de Cogan, plus two anonymous referees, for comments on earlier versions. Errors and omissions are the
writer's responsibility. Interstices is an allusion to a favourite metaphor of Lord Denning.
2Farnborough Airport Properties Co v HMRC [2019] EWCA Civ 118; [2019] STC 517.
'CTA 2010 Pt 5 (ss.97-188); J. Lindsay, A. James and M. Collins (eds), Taxation of Companies and Company
Reconstructions: Richard Bramwell, Q.C., LL.M. (Lond.), 9th edn (London: Sweet and Maxwell, 2009), Division P
(R 31 December 2019).
4TCGA s.170; CTA 2010 s. 1154(3) (Lindsay, James and Collins (eds), above fn.3, Division V); P. Harris, Corporate
Tax Law: Structure, Policy and Practice (Cambridge: CUP, 2013), 125-128.
'VATA 1994 s.43; A. Fairpo and D. Salter (eds), Revenue Law: Principles and Practice, 37th edn (Haywards Heath:
Bloomsbury, 2019), para.51-50.
6G. Loutzenhiser (ed.), Tiley s Revenue Law, 9th edn (Oxford: Hart, 2019), 1236-1238; Fairpo and Salter (eds), above
fn.5, para.44-125ff.
[2020] BTR, No.5 ® 2020 Thomson Reuters and Contributors](ViewImageLocal?handle=hein.journals/britaxrv2020&div=84&collection=&method=preview&ext=.png&size=3)
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Farnborough Airport Properties Co v HMRC: Statutory Interpretation and the "Interstices" of Administrative Law
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