Tapsell & Anor (as Partnership The Granleys) v Revenue & Customs [2011] UKFTT 376 (TC)

FTT-Tax
Tapsell & Anor (as Partnership The Granleys) v Revenue & Customs
[2011] UKFTT 376 (TC) · 2011-06-08
[1]This is an appeal against an amendment made under Section 28B(1) and(2) of the Taxes Management Act (“TMA”) 1970 to The Granley’s tax return for the year ended 5 April 2004.[2]The issues set out by the parties for the Tribunal to determine are:(a) whether expenditure of £106,014 in 2003/2004 was qualifying expenditure for the purposes of Capital Allowances;(b) whether a claim had been previously made and, if so, whether the Tribunal should direct HMRC to make a just and reasonable apportionment. Law[3]We were referred to the following sections of the Capital Allowances Act 2001 : 57 Available qualifying expenditure E+W+S+N.I. (1)The general rule is that a person’s available qualifying expenditure in a pool for a chargeable period consists of— (a)any qualifying expenditure allocated to the pool for that period in accordance with section 58, and (b)any unrelieved qualifying expenditure carried forward in the pool from the previous chargeable period under section 59. 58 Initial allocation of qualifying expenditure to pools E+W+S+N.I. (1)The following rules apply to the allocation of a person’s qualifying expenditure to the appropriate pool. (2)An amount of qualifying expenditure is not to be allocated to a pool for a chargeable period if that amount has been taken into account in determining the person’s available qualifying expenditure for an earlier chargeable period. (3)Qualifying expenditure is not to be allocated to a pool for a chargeable period before that in which the expenditure is incurred. (4)Qualifying expenditure is not to be allocated to a pool for a chargeable period unless the person owns the plant or machinery at some time in that period. (5)If a first-year allowance is made in respect of an amount of first-year qualifying expenditure— (a)subject to subsection (6), none of that amount is to be allocated to a pool for the chargeable period in which the expenditure is incurred, and (b)the amount that may be allocated to a pool for any chargeable period is limited to the balance left after deducting the first-year allowance. (6)If— (a)a first-year allowance is made in respect of an amount of first-year qualifying expenditure, (b)a disposal event occurs in respect of the plant or machinery in any chargeable period, and (c)none of the balance left after deducting the first-year allowance has been allocated to a pool for an earlier chargeable period, the balance (or some of it) must be allocated to a pool for the chargeable period in which the disposal event occurs. (7)Subsection (6) applies even if the balance is nil (because of a 100% first-year allowance). (8)“The appropriate pool” means whichever pool is applicable under the provisions of this Part apart from this section 185 Fixture on which a plant and machinery allowance has been claimed E+W+S+N.I. (1)This section applies if— (a)a person (“the current owner”) is treated as the owner of a fixture as a result of incurring capital expenditure (“new expenditure”) on its provision, (b)the plant or machinery is treated as having been owned at a relevant earlier time by any person (“the past owner”) as a result of incurring other expenditure, (c)the plant or machinery is within paragraph (b) otherwise than as a result of section 538 (contribution allowances for plant and machinery), and (d)the past owner is or has been required to bring the disposal value of the plant or machinery into account (as a result of having made a claim in respect of that other expenditure). (2)If the new expenditure exceeds the maximum allowable amount, the excess-(a) is to be left out of account in determining the current owner’s qualifying expenditure, or(b) if the new expenditure has already been taken into account for this purpose, is to be treated as expenditure that should never have been taken into account. 562 Apportionment where property sold together E+W+S+N.I. (1)Any reference in this Act to the sale of property includes the sale of that property together with any other property. (2)For the purposes of subsection (1), all property sold as a result of one bargain is to be treated as sold together even though— (a)separate prices are, or purport to be, agreed for separate items of that property, or (b)there are, or purport to be, separate sales of separate items of that property. (3)If an item of property is sold together with other property, then, for the purposes of this Act— (a)the net proceeds of the sale of that item are to be treated as being so much of the net proceeds of sale of all the property as, on a just and reasonable apportionment, is attributable to that item, and (b)the expenditure incurred on the provision or purchase of that item is to be treated as being so much of the consideration given for all the property as, on a just and reasonable apportionment, is attributable to that item. (4)This section applies, with the necessary modifications, to other proceeds (consisting of insurance money or other compensation) as it applies in relation to the net proceeds of a sale. (5)This section applies in relation to Part 5 as if expenditure on the provision or purchase of an item of property included expenditure on the acquisition of— (a)a mineral asset (as defined by section 397), or (b)land outside the United Kingdom 563 Procedure for determining certain questions affecting two or more persons E+W+S+N.I. (1)This section applies in relation to the determination of a question if— (a)at the time when the question falls to be determined, it appears that the determination is material to the liability to tax (for whatever period) of two or more persons, and (b)section 564 provides for this section to apply. (2)The Commissioners who are to determine the question, for the purposes of the tax of all the persons concerned, are given in subsections (3) to (5). (3)If— (a)the same body of General Commissioners has jurisdiction with respect to all the persons concerned, and (b)those persons do not agree that the determination is to be made by the Special Commissioners, the determination is to be made by that body of General Commissioners. (4)If— (a)different bodies of General Commissioners have jurisdiction with respect to the persons concerned, and (b)those persons do not agree that the determination is to be made by the Special Commissioners, the determination is to be made by such of those bodies of General Commissioners as the Board of Inland Revenue may direct. (5)In any other case, the determination is to be made by the Special Commissioners. (6)The Commissioners must determine the question in the same way as an appeal, but all the persons concerned are entitled— (a)to appear before and be heard by the Commissioners, or (b)to make representations to them in writing. 564 Questions to which procedure in section 563 applies E+W+S+N.I. (1)Section 563 applies in relation to the determination for the purposes of any of Parts 3 to 11 or this Part of any question about the way in which a sum is to be apportioned. (2)Section 563 applies in relation to any determination of the market value of property for the purposes of— (a)any provision of Part 2 (plant and machinery allowances), (b)section 423 (mineral extraction allowances: amount of disposal value to be brought into account), (c)section 559 (effect of successions), (d)section 568 or 569 (sales treated as being for alternative amount), or (e)section 573 (transfers treated as sales). (3)Section 563 applies in relation to any determination of the amount of any sums paid or proceeds for the purposes of section 357 (industrial buildings allowances: arrangements having an artificial effect on pricing). (4)If section 561 (transfer of a UK trade to a company in another member State) applies, section 563 applies— (a)for the purposes of the tax of both company A and company B referred to in that section, and (b)in relation to the determination of any question of apportionment of expenditure under section 561(3). Background Facts[4]Mr and Mrs Tapsell and Mr Lester, as a partnership called The Granleys, purchased The Haven Residential Care Home (“The Haven”) from Mr and Mrs Jones in December 2003.[5]The total cost was £650.001, comprised as shown in the purchase agreement of:(a) Benefit of contracts £1(b) Goodwill £12,500(c) Fixtures and fittings £40,000(d) Property £597,500[6]On 26 September 2003 Mr and Mrs Jones instructed a company called (at the time) Tax Management Services (“TMS”) which later changed its name to Moonwell. TMS were commissioned to value fixed plant and machinery in order to pursue an additional Retrospective Capital Allowance Claim.[7]A letter dated 8 September 2004 from Mrs Jones to Mr David Bracewell of TMS enclosed accounts and Capital Allowance documents from Mr and Mrs Jones’ previous accountant.[8]An email dated 2 December 2008 from Mr Bracewell to Mr Lester on behalf of the Appellants confirmed that Mr Jones had provided TMS with two cheques which subsequently bounced. As a result, Mr Bracewell’s email explains that TMS took the decision not to proceed with the claim on behalf of Mr and Mrs Jones as Mr Jones was moving to the USA and TMS were concerned that they may not receive payment due for work undertaken on the instruction of Mr and Mrs Jones. Mr Bracewell confirms in his email to Mr Lester that when The Haven was sold, TMS contacted the Appellants to see if they wished to proceed with the claim. Mr Bracewell confirmed that the claim report was never given to Mr and Mrs Jones.[9]A letter dated 17 July 2007 from TMS to the Appellants’ representatives Hazlewoods LLP with which we were provided set out further details of the background to this case. Mr Bracewell, on behalf of TMS, stated in the letter that TMS were asked by Mr and Mrs Jones in November 2003 to assist with a retrospective capital allowances claim. The letter stated:
“We completed all our work...but the business was sold before they could make a claim so we approached the new owners with regard to making a claim...”
[10]The completed report dated 9 March 2004 was provided to the Appellants after they had purchased the property. The report produced by TMS identified additional plant and machinery of £106,014. None of the items covered by the report were included in the figure of £40,000 relating to fixture and fittings in the purchase agreement referred to in paragraph 5.[11]An email dated 15 December 2009 from Mr Bracewell of TMS to the Appellant’s representative stated:
“...I had already had two bounced cheques...of the Jones’s...so I reasoned that my chances of receiving my fees were virtually nil. I was conscious, however, that they might have tried to somehow interfere with Mr Lester’s claim so I hadn’t at this stage told them that I wasn’t going to proceed with their’s so they were still supplying me with information...”
[12]The Appellants partnership tax return for the year ended 5 April 2004 was received by HMRC on 17 January 2005 and included the claim for 40% first year allowance on the additional items identified within the report which reduced its taxable profits by £42,405. The Appellants also claimed capital allowances on the £40,000 identified within the sale agreement relating to fixtures and fittings.[13]On 1 March 2005 the partnership tax return of Mr and Mrs Jones was received in relation to The Haven. The capital allowances claim of Mr and Mrs Jones contained in the partnership tax return was declared as £68,811 for the period 2003/2004 as compared with that claimed for the period 2002/2003 which was £10,758.[14]As there is no requirement for a breakdown of capital allowance claims within a Self Assessment Tax Return, and no such details were provided by Mr and Mrs Jones, the details of the claim are unknown.[15]HMRC disallowed the Appellants’ claim in respect of the additional expenditure of £106,014 on the basis that the Appellants’ have failed to show that the same expenditure has not been claimed by Mr and Mrs Jones.[16]A review of HMRC’s decision was carried out by Mr Jackson, an officer of HMRC. The conclusion of the review was notified to the Appellants by letter to Mr Lester dated 15 July 2009. The grounds set out in the letter can be summarised as follows;(a) The starting point is Section 562 CAA 2001 which requires that, for capital allowances purposes, the expenditure on an item shall be established by apportioning the consideration given for the whole of the property on a just and reasonable basis. This applies regardless of how the consideration is apportioned in the sale agreement.(b) The sale agreement apportioned the consideration as £40,000 for fixtures and fittings, £12,500 for goodwill and £597,500 for the premises. The partnership accounts, which reflected the valuation carried out by TMS, apportioned £12,500 for goodwill, £146,014 for fixtures, fittings and equipment and £491,486 for the premises.(c) Once expenditure is established, Section 185 CAA 2001 can restrict the amount claimed to ensure that the amount on which capital allowances are claimed cannot exceed the original cost.(d) Section 185 CAA 2001 provides that where a past owner is required to bring a disposal value into account (in their capital allowances computations), the new owner’s qualifying expenditure is to be limited to that value. The past owner is required to bring a disposal value to account if they have claimed capital allowances on the fixture.(e) The amount which relates to fixtures is unknown, but is at least £106,014 in accordance with the report produced by TMS. If the previous owners claimed capital allowances on any of these items, then the amount on which the Appellants can claim is limited to the disposal value that they were required to bring into account.(f) HMRC cannot determine whether claims have been made in respect of these fixtures or not. Internal guidance taken from the Capital Allowances Manual (CA26400) sets out the policy which HMRC is required to follow and states that “It is the responsibility of the taxpayer to obtain and provide details of the past owner and the disposal value. Where it seems likely that Section 185 will apply but the taxpayer does not provide details of the previous disposal value, no allowances should be given as the previous disposal value may be nil or negligible.”(g) In this particular case there is every possibility that the previous owners have claimed in respect of some or all of the fixtures. No evidence of the amounts claimed on fixtures has been obtained from the vendors and the only evidence we have of the disposal value that they are likely to have used is the amount shown in the sale agreement of £40,000.(h) There was a strong possibility that Section 185 CAA 2001 should apply in this case and HMRC’s guidance has been correctly followed in refusing the claim. The Appeal[17]By Notice of Appeal dated 12 August 2009 the Appellants appealed against the decision by HMRC following review, to uphold the amendment to the partnership Tax Return.[18]The effect of the amendment was to increase the partnership’s profits by £48,099 as a result of the disallowance of expenditure of £106,014 for the purposes of Capital Allowances.[19]The grounds of appeal were set out within the Notice of Appeal. It was submitted that the Appellant acted in good faith and had taken all reasonable steps to verify whether a claim has been made previously. On this basis a claim for capital allowances can be made. The Appellant disputes HMRC’s suggestion that the Appellant’s would need to provide evidence that no claim was made by Mr and Mrs Jones, or the breakdown of such a claim as the Appellant would not have had the ability to request such information, particularly given the fact that Mr and Mrs Jones moved to America. HMRC have provided no evidence to support their conclusion that there is a “strong possibility” that Mr and Mrs Jones have made a claim. Submissions[20]We were provided with Statements of Case from both parties, together with 2 bundles of supporting documentation, all of which we considered carefully. We also had the opportunity to hear oral submissions from Mr Lester, nominated partner of The Granleys.

(i) Case for the Appellant

[21]It was submitted on behalf of the Appellants that they have acted in good faith and that it was beyond the ability of the Appellants to request information from Mr and Mrs Jones as to whether a claim was made as any claim they made was after the sale of the property and the Appellants were under the impression that Mr and Mrs Jones had moved to America. HMRC have provided no evidence in support of their contention that Mr and Mrs Jones made a claim and further, Mr and Mrs Jones would not have had access to the building after sale and therefore the only source of information to enable a claim was the report of TMS which was not provided to Mr and Mrs Jones. The Appellant’s representatives submitted that their enquiries established that Mr and Mrs Jones carried on multiple business ventures during the years in question and it was suggested that the explanation for the level of capital allowances claimed on the Jones’ tax return related to other business interests.[22]It was submitted on behalf of the Appellant that Section 562 CAA 2001 specifically deals with circumstances such as exist in this case. Section 562 provides for a “just and reasonable apportionment” to be applied to both parties to the contract and we were invited to follow the procedure set out in Section 563 to determine the disputed valuation.[23]The Appellant contended that to oblige a purchaser to enquire prior to completion whether a claim would be made by a vendor would be to alert the vendor to the existence of a potentially valuable asset which could compromise the purchaser’s negotiating position and would therefore lack commercial logic.[24]The Appellant disputed that the conditions of Section 185 CAA 2001 are satisfied and submitted that the onus is upon HMRC to show that such conditions are satisfied in order for the legislation to be applicable. It was submitted that there is no legal presumption that capital allowances were or may have been claimed.[25]It was submitted that there is no justification in law for HMRC’s refusal of the Appellant’s claim and that the wording of Section 185 CAA 2001 cannot be interpreted so as to permit HMRC to make assumptions. The Appellant contends that there is no basis in law for HMRC to place the onus on a taxpayer to obtain and provide information that is outside the taxpayer’s power or possession to obtain and which should be in the possession of HMRC.[26]It was submitted that had the Appellant been aware of the additional items identified in the report of TMS, the apportionment within the sale agreement of £40,000 would not have been agreed. If there are additional fixtures and fittings other than those within the purchase agreement, the apportionment of the purchase cost would not represent a just and reasonable apportionment. (ii) Case for HMRC[27]HMRC submitted that the conditions of Section 185 CAA 2001 are satisfied and therefore applicable to this case.[28]It was submitted that the onus rests on the person making the claim to demonstrate that capital allowances have not been claimed on the expenditure by the previous owners and that, as a consequence, the claim is not invalidated by Section 185 CAA 2001.[29]We were referred to the case of West Somerset Railway Plc v Chivers (Inspector of Taxes) [1995] STC (SCD) 1 which HMRC contended has similarities to the case before us in that the taxpayer’s claim to capital allowances would only be valid if there had been no such claim by previous owners. The case cited also made clear that the burden of proof lies upon the person making the claim and HMRC submitted that similarly, the Appellants in this case bear the burden of proving that there had been no previous claim by Mr and Mrs Jones.[30]HMRC accept that their internal guidance CA26400 is not legally binding on the Tribunal but contends that all available evidence indicates that a claim was made by Mr and Mrs Jones in respect of the additional plant and machinery expenditure as identified in the report prepared by TMS and that the disposal value used by Mr and Mrs Jones was either the £40,000 contained in the sale agreement or a nil amount.[31]The evidence relied on by HMRC in support of their contention is:(a) Mr and Mrs Jones, by commissioning a report from TMS were aware of the potential claim available to them and, irrespective of the fact that they did not receive a copy of the report, there is no evidence to suggest that they did not proceed with a claim;(b) Mr and Mrs Jones were informed by TMS that a 5 stage process would be undertaken, including a survey of the premises, which would be completed by October 2003. Mr and Mrs Jones were informed that unless another business was started up in the short term, the remainder of the repayment would be available from HMRC when they submitted their next return;(c) Contact continued between Mr and Mrs Jones and TMS after the sale of the premises in the form of a letter from Mrs Jones to TMS dated 8 September 2004 which refers to “our recent conversation”;(d) TMS did not inform Mr and Mrs Jones that they would not proceed with their claim as there were concerns that they may “interfere with” the Appellant’s claim;(e) The Appellants’ capital allowances claim was contained within their return which reached HMRC on 17 January 2005. As Mr and Mrs Jones did not submit their partnership return until 1 March 2005 the Appellants could not have known, at the time of making their claim, whether Mr and Mrs Jones would make a claim unless they had obtained this information from Mr and Mrs Jones;(f) Mr and Mrs Jones’ partnership tax return was in relation to The Haven and therefore would not have included any other business activities;(g) It can be deduced from the increase in the 2003/2004 claim (£68,811) as compared with the previous year (£10,758) that Mr and Mrs Jones made an additional capital allowance claim in respect of the full amount of £106,014. HMRC provided a computation to support this assumption;(h) The disposal proceeds used in Mr and Mrs Jones’ capital allowance computation are not known but it is reasonable to assume that they were in the region of £40,000 as stated in the sales agreement;(i) The Appellants have limited their claim for fixtures and fittings to qualifying expenditure of £40,000. The Appellants have failed to show that the expenditure of £106,014 has not previously been claimed. (iii) Mr Lester[32]Mr Lester stated at the hearing that he believed that the vendors had intended to move to America following the sale as Mrs Jones was a USA citizen. Mr Lester stated that he had tried, following the sale, to trace the vendors but to no avail. Mr Lester confirmed that there had been no discussions between the parties as to whether a claim for capital allowances would be made and that in fact, he only became aware of the possibility of making a claim when approached by TMS to buy the report which had been commissioned by Mr and Mrs Jones. Mr Lester accepted that he was unaware of the contact between TMS and the vendors at the time when he had instructed TMS and conceded that he was unable to say whether or not there had been discussions between TMS and Mr and Mrs Jones as to the contents of the report.[33]Mr Lester stated that he and his partners had gone to reasonable lengths to establish whether the vendors had made a claim and that even if they had, as he understood it, the Appellants were not barred from making a claim, which they had done in good faith. Decision[34]We accepted that Mr Lester had acted in good faith and were sympathetic to his position, however the issue for us was whether a claim could be made by the Appellants, and, if so, in what sum.[35]We carefully considered the submissions of both parties. Our starting point was whether the vendors had made a claim to capital allowances.[36]There was no dispute that an election to apportion the sale price had not been made by the parties and consequently Section 198 CAA 2001 takes this case no further.[37]The letter from Mr and Mrs Jones to TMS dated 26 September 2003 encloses the accounts for the period 1998 to 2002. We inferred that this letter did not contain the vendor’s capital accounts as by letter dated 8 September 2004 Mr and Mrs Jones wrote to TMS enclosing the capital accounts.[38]The completed report was dated 9 March 2004, at which time TMS could not have known whether capital allowances for items identified within their report either had been claimed previously or would be claimed by the vendors upon submission of their partnership return for the year ended 5 April 2004.[39]We found as a fact that by commissioning the report and the contact between TMS and the vendors continuing until, at least, September 2004, Mr and Mrs Jones were contemplating making a claim. We found that it was possible, if not highly likely that Mr and Mrs Jones would make a claim, even without the assistance of the report prepared by TMS. TMS, as experienced practitioners in the area of capital allowances, ought to have known that without the documents supplied by Mr and Mrs Jones in September 2004, no claim could have been made on behalf of the Appellants. Further, we found that TMS made no attempt, despite the contact with the vendors, to clarify whether, and with what disposal figure, a claim might be made by Mr and Mrs Jones.[40]We found that inexplicably TMS went further and sought to prevent Mr and Mrs Jones from trying to” somehow interfere with Mr Lester’s claim so I hadn’t at this stage told them that I wasn’t going to proceed with their’s so they were still supplying me with information...” (email dated 15 December 2009 from Mr Bracewell of TMS to the Appellant’s representative). We found that TMS were content to use the information provided by Mr and Mrs Jones without making any attempts to enquire whether Mr and Mrs Jones had, or intended to, make a claim.[41]We therefore considered the burden of proof in this case. The appeal is brought against an amendment under Section 28B(1) and(2) TMA 1970. Section 50 (6) Taxes Management Act 1970 It is a well established principles that in such appeals the burden of proof lies with the taxpayer to show that the amendment or adjustment is incorrect.[42]We rejected the Appellant’s contention that the case of West Somerset Railway Plc v Chivers (Inspector of Taxes) [1995] STC (SCD) 1 can be distinguished due to the lengthy period over which it had to be shown that the Appellant’s predecessors had had not become entitled to an allowance in respect of capital expenditure. We found that the case had addressed similar issues, irrespective of the length of time involved. The Court was clear in stating:
“ The burden of proof in this appeal lies fairly and squarely upon the company and I must say at once that Mr P Rivett FCCA, who appeared for the company and argued its case with no little skill failed to show that 'no person has previously become entitled to an allowance in respect of capital expenditure incurred on the provision of the fixture'. I have some sympathy with him because he faced the almost impossible task of proving a negative covering a period from 1975 back into the mists of the last century. It seems that not even the Revenue records could assist Mr Rivett in his task and he was compelled therefore to rely upon mere assertion and supposition… In my judgment, on the balance of probabilities, it is probable that either the Great Western Railway Co or British Rail became entitled to an allowance prior to 1976 (and therefore before 1989) in respect of capital expenditure on the railway line as demised to the company by the long lease .”
[43]We found that this case confirmed our view that in the circumstances of this appeal, the burden of proof must lie with the Appellants to show that there had been no previous claim made by the vendors to capital allowances.[44]The Appellants have failed to discharge this burden of proof; it is quite simply unknown whether or not Mr and Mrs Jones made a claim and therefore the appeal must fail as being invalidated by Section 185 (2) (b) CAA 2001.[45]Even if that were not the case, we were satisfied on the balance of probabilities that the evidence pointed to the fact that a claim had been made, taking into account the vendors’ awareness of the potential claim and the substantial increase in their capital allowance claim in respect of plant and machinery for the year 2003/2004 (£68,811) as compared to the previous year (£10,758).[46]Our finding on the balance of probabilities that a claim was made does not bar the Appellants from making a claim, however, in so finding Section 185 CAA 2001 becomes applicable in capping the amount on which the Appellants can claim to the disposal value that the vendors were required to bring into account.[47]We do not find that the submission of the Appellant that HMRC must prove that the conditions of Section 185 CAA 2001 are satisfied is correct. The wording of Section 185 (1) (d) is that the owner is/ has been required to bring the disposal value of the plant or machinery into account as a result of having made a claim in respect of that other expenditure. If the burden is on the Appellant to show that the amendment made to the return was incorrect and the burden remains on the Appellant to show whether or not there was a claim made by the vendors, it follows that the onus was on the Appellants to enquire as to the disposal value used by the vendors.[48]On Mr Lester’s own evidence, no enquiries were made as to whether a claim would be made or the figures to be used should a claim be made. HMRC are unable to assist as there is no requirement for details to be given as to how capital allowances are calculated in a Self Assessment Tax return and therefore the records held by HMRC provide no clarification in this regard.[49]The case of Fitton v Gilders and Heaton (H M Inspector of Taxes) 36 TC 233 on appeal dealt with the issue of apportionment under Section 329 (1) Income Tax Act 1952. It was held “the Commissioners function under Section 326 (1) is not necessarily to discover what was the intention of the parties; it is to make a just apportionment. And they have jurisdiction to do that, as I have said, notwithstanding that the apportionment at which they arrived may be inconsistent with the intention of the parties as discovered from the clear language of the agreement to which the parties put their names”[50]We agreed that we are not bound by the terms of the sale agreement between Mr and Mrs Jones and the Appellants in this case. However on the limited evidence available to us, this was an “arms length” transaction where the figures apportioned within the sale agreement were agreed by the Appellants and therefore in the absence of any further evidence we could not find any just and reasonable basis upon which to make an apportionment.[51]Given the limited evidence available in this case and the lack of any information as to whether the vendors had made a claim for capital allowances or, if so, the disposal value used by them, we found HMRC’s decision to disallow the Appellant’s claim and amend the their tax return for the year ended 5 April 2004 to be entirely reasonable. We were satisfied that the Appellants had not discharged the burden of proof in this case or shown that the amendment made by HMRC was incorrect.[52]The appeal is dismissed.[53]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. TRIBUNAL JUDGE RELEASE DATE: 8 June 2011