Case No: A3/2009/1411
Neutral Citation Number: [2010] EWCA Civ 261
COURT OF APPEAL (CIVIL DIVISION) 
ON APPEAL FROM CHANCERY DIVISION 
MR JUSTICE DAVIS 
Royal Courts of Justice
Strand, London,
WC2A 2LL

19 March 2010
B e f o r e :
THE CHANCELLOR OF THE HIGH COURT LORD JUSTICE RIMER
And
LORD JUSTICE ETHERTON
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Between:

	THE COMMISSIONERS FOR HER MAJESTY'S REVENUE & CUSTOMS	Appellants	
	- and -		
	HALCYON FILMS LLP	Respondents	
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 (Transcript of the Handed Down Judgment of
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Ingrid Simler QC and Andreas Giedhill (instructed by HM Revenue & Customs) for the Appellants
Jonathan Peacock QC and Jolyon Maugham (instructed by DLA Piper) for the Respondents

Hearing dates: 23rd and 24th February 2010
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Judgment
Lord Justice Etherton:
Introduction
1.	This appeal by the Commissioners for HM Revenue and Customs ("HMRC") raises a short point of law on the meaning and effect of section 101 of the Finance Act 2002. That was one of a number of related statutory provisions, now repealed, which at the relevant time governed tax relief for expenditure on the production and acquisition of British films. It is a second appeal within CPR 52. 13. Patten LJ gave permission to appeal on the grounds that it raises a point of law of sufficient importance, relevant to a number of other cases, and with a sufficient prospect of success to warrant a second appeal. 
The facts
2.	For the purpose of identifying and resolving the point of law in issue on this appeal, the factual context may be summarised very briefly. The Respondent, Halcyon Films LLP ("Halcyon"), acquires feature films from film distributors and leases them back. In its tax return for the year to 5 April 2004 it claimed a loss of £14, 021, 371. That loss principally comprised a deduction of £12, 183, 932 under section 42 of the Finance (No. 2) Act 1992 ("section 42"), representing relief on Halcyon's expenditure in the tax year on the acquisition of three films, entitled Asylum, Method and Samantha's Child. 
3.	Following an enquiry into Halcyon's return, on 18 January 2007 HMRC issued a closure notice, disallowing the claim to section 42 relief in its entirety. On 25 January 2007 Halcyon gave notice of appeal to the Special Commissioners. The appeal was heard over seven days from 18 to 26 February 2008 in conjunction with an appeal by Micro Fusion 2004-1 LLP ("Micro Fusion"), which raised different issues of principle as to the availability of section 42 relief. 
4.	On 30 June 2008 the Special Commissioners (Edward Sadler and John Clark) handed down separate judgments in respect of Micro Fusion and Halcyon. They allowed both Micro Fusion's and Halcyon's appeals. HMRC appealed in both cases. HMRC's appeals were heard together by Davis J. On 22 May 2009 he handed down a composite judgment in both appeals. He allowed HMRC's appeal in respect of Micro Fusion, but dismissed their appeal in respect of Halcyon. 
5.	We heard together HMRC's appeal from Davis J in respect of Halcyon and an appeal by Micro Fusion. This judgment is concerned only with the former. 
The issue and the statutory framework
6.	Before the Special Commissioners there were four issues in dispute between HMRC and Halcyon. By the time of the hearing before Davis J there was only one. That issue was whether, on the agreed facts, s.101 of the Finance Act 2002 ("section 101") precluded Halcyon from claiming any relief under section 42. Davis J held that it did not. HMCR submit that he was wrong in that conclusion. 
7.	The resolution of that issue turns on the inter-relationship between section 42, section 48 of the Finance (No 2) Act 1997 ("section 48") and section 101. Each of those provisions was concerned with relieving expenditure on the production or acquisition of a "qualifying" film, as defined by section 43(1) of the Finance (No 2) Act 1992. That was a film which satisfied certain criteria and was certified by the Secretary of State as "a British film" for the purposes of schedule 1 to the Films Act 1985. 
8.	Davis J said in paragraph 16 of his judgment, and both sides accept, that the purpose behind section 42 was a desire to encourage investment in the British film industry by granting appropriate tax incentives. Section 42 enabled a person who had incurred production expenditure on a qualifying film, or who had incurred expenditure on acquiring a qualifying film, to write off that expenditure over a three year period. It was in the following terms, so far as relevant. 
"42 Relief for production or acquisition expenditure
(1) Subject to the following provisions of this section and any other provisions of the Tax Acts, in computing for tax purposes the profits or gains accruing to a person in a relevant period from a trade or business which consists of or includes the exploitation of films, that person shall (on making a claim) be entitled to deduct an amount in respect of any expenditure -
(a) which is expenditure to which subsection (2) or (3) below applies...
(2) This subsection applies to any expenditure of a revenue nature incurred by the claimant on the production of a film -
(a) which was completed in the relevant period to which the claim relates or an earlier relevant period, and
(b) the master negative of which or any master tape or master disc of which is a qualifying film, tape or disc.
(3) This subsection applies to any expenditure of a revenue nature incurred by the claimant on the acquisition of the master negative of a film or any master tape or master disc of a film where; -
(a) the film was completed in the relevant period to which the claim relates or an earlier relevant period, and
(b) the master negative, tape or disc is a qualifying film, tape or disc.
(4) Any amount deducted for a relevant period under subsection (1) above shall not exceed -
(a) one third of the total expenditure incurred by the claimant on the production of the film concerned or the acquisition of the master negative or any master tape or master disc of it,
(b) one third of the sum obtained by deducting from the amount of that total expenditure the amount of so much of that total expenditure as has already been deducted by virtue of section 41 above, or
(c) so much of that total expenditure as has not already been deducted by virtue of section 40B or 41 above or this section, whichever is less....
(5) In relation to a relevant period of less than twelve months, the references to one third in subsection (4) above shall be read as references to a proportionately smaller fraction.
9.	In a report published in 1996 the Advisory Committee on Film and Finance (the Middleton Committee) recommended to the Secretary of State for National Heritage that, among other things, the British film industry be assisted by permitting 100 per cent of production or acquisition expenditure to be written-off in the period or periods in which it was incurred. That recommendation was broadly implemented by section 48, but only in respect of small qualifying films. That section modified section 42 by providing, broadly speaking, that, in the case of a film with total production costs of £15 million or less, a person who had incurred expenditure on its production or acquisition could write-off that expenditure over a one year period rather than over three years. It was in the following terms, so far as relevant. 
"48 Relief for expenditure on production and acquisition
(1) Subject to subsection (4) below, section 42 of the Finance (No 2) Act 1992 shall have effect in relation to any expenditure to which this section applies as if the following subsection were substituted for subsections (4) and (5) (which for any period limit relief for film production and acquisition expenditure to a third, or a proportionately reduced fraction, of the relievable expenditure) -
"(4)The amount deducted for a relevant period under subsection (1) above shall not exceed so much of the total production expenditure incurred by the claimant on —
(a) the production of the film concerned, or
(b) the acquisition of the master negative or any master tape or master disc of it,
as has not already been deducted by virtue of section 40B or section 41 above of this section. "
(2) Subject to subsection (3) below, this section applies to so much of any expenditure falling within paragraphs (a) and (b) of section 42(1) of the Finance (No 2) Act 1992 as is expenditure in relation to which each of the following conditions is satisfied, that is to say - 
(a) the expenditure is expenditure incurred on or after 2nd July 1997 and before 2nd July 2005, 
(b) the film concerned is a film with a total production expenditure of £15 million or less; and
(c) the film concerned is a film completed on or after 2nd July 1997.
(3) This section does not apply to so much of any expenditure falling within section 42(3) of the Finance (No 2) Act 1992 (acquisition expenditure) as exceeds the amount of the total production expenditure on the film concerned.
(4) Where this section applies to only part of any expenditure to which subsection (2) or (3) of section 42 of the Finance (No 2) Act 1992 applies in the case of any film, the amount deducted by virtue of subsection (1) of that section for a relevant period shall not exceed the sum of the following amounts -
(a) the maximum amount of expenditure to which this section applies that is deductible for that period in accordance with subsection (1) above; and 
(b) the maximum amount specified in subsection (5) below.
(5) The amount mentioned in subsection (4) above is the maximum amount which would be deductible for the relevant period in accordance with subsection (4) of section 42 of the Finance (No 2) Act 1992 if-
(a) in paragraphs (a) and (b) of that subsection (but not in paragraph 
(c) ) the references to expenditure incurred by the claimant did not include references to any expenditure to which this section applies; and
(b) the maximum amount mentioned in subsection (4)(a) above had already been deducted by virtue of that section.
(6) In this section "total production expenditure", in relation to any claim for relief under section 42 of the Finance (No 2) Act 1992 in the case of any film, means (subject to subsections (6A) and (7) below) the total of all expenditure on the production of the film, whenever incurred and whether or not incurred by the claimant.
(6A) For the purposes of this section the production expenditure on a film shall be taken not to include any amount that at the time the film is completed -
(a) has not been paid, and
(b) is not the subject of an unconditional obligation to pay within four months after the date of completion.... "
10.	The Finance Act 2002 contained three provisions to restrict the availability of tax relief for expenditure on the production or acquisition of films, namely sections 99, 100 and 101. Section 99 restricted relief to films genuinely intended for theatrical release. So far as relevant, it was as follows. 
"99 Restriction of relief to films genuinely intended for theatrical release
(1) Relief under the following provisions is available only for a film that is genuinely intended for theatrical release -
(a) section 40D of the Finance (No 2) Act 1992 (c 48) (election to claim capital allowances for production or acquisition expenditure);
(b) section 41 of that Act (relief for pre-production expenditure);
(c) section 42 of that Act (three year write-off for production or acquisition expenditure);
(d) section 48 of the Finance (No 2) Act 1997 (c 58) (relief for expenditure on production or acquisition of film with total production expenditure of £15 million or less)."
11.	Section 100 amended section 48 by, among other things, inserting a new sub-section (6A), excluding certain unpaid expenditure from production expenditure for the purpose of section 48. It was as follows, so far as relevant. 
"100 Exclusion of deferments from production expenditure
(1) Section 48 of the Finance (No 2) Act 1997 (c. 58) (relief for expenditure on production or acquisition of qualifying film with total production expenditure of £15 million or less) is amended as follows.
(2) In subsection (6) (meaning of "total production expenditure"), for "subject to subsection (7)" substitute "subject to subsections (6A) and 
 
(3) After that subsection insert -
"(6A)For the purposes of this section the production expenditure on a film shall be taken not to include any amount that at the time the film is completed -
(a) has not been paid, and
(b) is not the subject of an unconditional obligation to pay within four months after the date of completion. "
12.	Section 101 was, the Judge said in paragraph 100 of his judgment and both parties agree, designed to counteract "double-dipping" or "multi-dipping". That was the practice of selling the same film twice or more to facilitate multiple claims to relief for expenditure on the acquisition of a film. Section 101 was intended to achieve that objective by restricting claims to acquisitions by the producer or directly from the producer, and in any event barring claims in relation to any acquisition other than the first. It was confined, however, to small films within section 48, that is to say qualifying films with total production expenditure of £15 million or less ("small films"). Section 101 was as follows, so far as relevant: 
"101 Restriction of relief for successive acquisitions of the same film
(1) Relief under section 48 of the Finance (No. 2) Act 1997 (relief for expenditure on production or acquisition of film with total production expenditure of £15 million or less) in respect of acquisition expenditure is available only in relation to an acquisition -
(a) by the producer, or
(b) directly from the producer,
and not in relation to any subsequent acquisition (or in relation to any acquisition within paragraph (a) or (b) other than the first).
(2) For this purpose -
(a) "acquisition expenditure" means expenditure to which subsection (3) of section 42 of the Finance (No 2) Act 1992 (c 48) applies (relief for acquisition expenditure);
(b) "acquisition" means acquisition of the master negative of a film, or any master tape or master disc of a film, within the meaning of that section; and
(c) "the producer" means the person who commissions the making of the film and is entitled to control its exploitation.
(3) This section applies to acquisition expenditure incurred on or after on or after 30th June 2002... "
13.	It is common ground that section 101 applied to Halcyon's claim for relief, which was the subject of the closure notice. Halcyon was not the producer of the three films in respect of which it claimed relief. Nor did it acquire them directly from the producer. Each film had a total production expenditure of less than £15 million, was completed after 2 July 1997, and was acquired for expenditure incurred during the tax year ending April 2004. It is common ground, therefore, that section 101 prevented a claim to 100 per cent first year relief pursuant to section 48. Halcyon maintains that section 101 did not prevent it claiming deductions over three years under section 42 instead. HMRC's case is that the effect of section 101 was to bar all claims to acquisition expenditure relief under section 42 in respect of a taxpayer such as Halcyon, which was neither the producer of a small film nor a purchaser from the producer. Both the Special Commissioners and the Judge agreed with Halcyon. 
The decisions of the Special Commissioners and the Judge
14.	The reasoning of the Special Commissioners, leading to their decision that section 101 did not preclude Halcyon's entitlement to relief for its acquisition expenditure over three years under section 42, was as follows. Section 48(3) makes clear that section 48 does not apply to acquisition expenditure within section 42(3) in excess of the total production expenditure. Section 48(3), (4) and (5) ensure that such excess expenditure is brought back within section 42. In that way section 48 preserves the deductibility of certain expenditure under section 42 in respect of small films where that expenditure does not qualify under section 48. That is properly to be regarded as illustrative of a general principle that expenditure which for any reason fails to qualify as deductible pursuant to section 48 automatically reverts to being deductible under section 42. The deductibility relief under section 48 is not separate from that under section 42, but is a modified version of the basic section 42 regime. The effect of section 101 is to treat acquisition expenditure relating to "non-original" acquisitions as falling outside the special section 42 regime provided by section 48, with the same consequence as the failure of one of the three conditions in section 48(2): the expenditure falls back into, or remains within, the basic section 42 regime. 
15.	The Judge's reasoning leading to his dismissal of HMRC's appeal was as follows. It is hard to see an entirely convincing rationale or purpose for the conclusion advanced by HMRC that, where section 101 applies, not only is there lost the possibility of claiming the more generous phasing of relief by reference to section 48 but also the possibility of claiming the relatively less generous relief by reference to section 42. No admissible evidence was adduced to identify an intention to treat so differently in that way relief on "non-original" acquisitions of small films and of large films. The fundamental point is that HMRC's submissions do not accord with the statutory language. If those submissions are correct, the heading of section 101 would more appropriately have said "Removal of relief.." rather than "Restriction of relief...". More importantly, it is clear that by using the phrase "[r]elief under section 48" in section 101(1) the draftsman was intending to refer to the circumstances whereby a taxpayer came within the ambit of section 48 and was entitled to claim extended relief accordingly. This is confirmed by the terms of section 99, where the draftsman was plainly proceeding on the basis that "relief" under section 48 was not to be taken as being relief under section 42, and by the descriptive wording in brackets in section 99(1) showing the draftsman's understanding of section 42 and section 48. It is also consistent with the descriptive wording in section 100. It follows that section 101 does not, where its restriction applies, have the effect of precluding the taxpayer from reverting to reliance on the less generous relief provisions of section 42 taken on their own. 
HMRC's submissions
16.	HMRC contend that both the Special Commissioners and the Judge were wrong in their analysis and conclusion. HMRC's arguments, skilfully and effectively elaborated in oral submissions by Ms Ingrid Simler QC before us, were as follows. 
17.	HMRC's starting point, which is common ground, is that section 48 did not create a free-standing relief in respect of small films. In Ms Simler's words, section 48 was parasitic on section 42. Even after the enactment of section 48, it was section 42 which conferred the relief, but as modified by section 48. Nor was the modification by section 48 optional. Section 48 (1) provided that the modified regime "shall have effect" in cases within section 48. Accordingly, in relation to expenditure within section 48, the taxpayer had no right to elect for relief under the unmodified section 42, for example if for any reason the taxpayer would have preferred to write-off the expenditure over three years rather than one. 
18.	Turning then to section 101 itself, HMRC contend as follows. The draftsman has plainly said in section 101(1) that acquisition relief under section 48 is barred completely save in relation to an acquisition by the producer, or directly from the producer. If Parliament had intended, as Halcyon argues, merely to curtail the ambit of the expenditure within section 48, it would have done so expressly, most obviously by supplementing section 48(2) or (3). Instead, both the heading to section 101 and the text of sub-section (1) of the section were expressly framed as curtailing the relief itself rather than the extent of the qualifying expenditure. Bearing in mind that section 48 did not itself confer a free-standing relief, but operated by way of a compulsory modified regime under section 42 for all cases within section 48, it is clear that the intention of the draftsman was that, in cases within section 48, there should be no section 42 relief on "non-original" acquisitions. 
19.	HMRC advance the following specific criticisms of the Judge's reasoning. He did not deal at all with HMRC's argument which I have rehearsed in paragraph 18 above. 
For the reasons given there, the language of section 101 shows that Parliament was addressing the entirety of the relief rather than just the ambit of expenditure to which section 48 applied. The Judge was, therefore, wrong to consider that Halcyon's interpretation of section 101 was supported by the heading to section 101 and the reference to "relief" in section 101(1). Moreover, so far as concerns the heading of section 101, even on HMRC's interpretation of section 101 relief for successive acquisitions was restricted rather than removed since it remained available for films outside the scope of section 48. The Judge was also wrong to consider that Halcyon's interpretation of section 101 was supported by the language of sections 99 and 100. Neither they, nor the reference to "relief under section 48" in section 101(1), show that the draftsman assumed that section 48 was itself a relieving provision and that section 42 and section 48 created separate reliefs. Even if the draftsman did make that mistaken assumption, the language of sections 99, 100 and 101 is equally consistent with an assumption of the draftsman that section 48 was the sole applicable relieving provision where it applied. Expressed differently, there is nothing in sections 99, 100 or 101 to show that the draftsman thought that section 42 operated concurrently with section 48 in respect of the same expenditure. In any event, a mistaken assumption by the draftsman that section 48 was itself a relieving provision is irrelevant. In the light of the mandatory terms of section 48(1), the Judge failed to explain how a case satisfying the preconditions for the application of section 48 could fall back into the unamended section 42. Indeed, if anything, sections 99 and 100 support HMRC's case since they show that the draftsman was well aware of the difference between curtailing expenditure within section 48, which was the specific subject of section 100, and curtailing the relief itself, which was the subject of sections 99 and 101. Further, contrary to the view expressed by the Judge, HMRC's approach to the interpretation of section 101 is consistent with a sound policy. The purpose of that section being, as the Judge acknowledged, to prevent double or multiple-dipping, it makes perfect sense to interpret it as barring all relief in respect of "non-original" acquisitions. Indeed, the contrary interpretation makes little policy sense since the ability of the taxpayer to spread the benefit over three years rather than one would leave the vice of double or multiple-dipping still very much alive.
20.	HMRC also reject the analysis of the Special Commissioners that section 48(3), (4) and (5) are illustrative of a general principle that expenditure which fails to qualify as deductible pursuant to section 48 automatically reverts to being deductible under section 42. Ms Simler submitted that no such general principle could be derived from those provisions because the excess expenditure with which those sub-sections were concerned was outside section 48, and for that reason fell within section 42. 
Discussion
21.	Notwithstanding those careful and attractive submissions, I consider that the conclusion of both the Special Commissioners and the Judge was correct: acquisition expenditure which would have fallen within section 48, but for the provisions of 
section 101, can still qualify for relief under section 42. At the end of the day, the point is a relatively short one.
22.	The starting point is the language of section 101 itself. As Mr Jonathan Peacock QC, for Halcyon, emphasised, that language focuses on the disallowance of certain acquisition expenditure for the purposes of section 48. That is the natural reading of section 101(1), which limits the availability of the relief under section 48 to "acquisition expenditure... only in relation to an acquisition" by the producer, or directly from the producer. It is underscored by the fact that the draftsman expressly defined "acquisition expenditure" in section 101(2)(a). If HMRC were correct about Parliament's intention, the words "in respect of acquisition expenditure" in section 101(1) would be redundant, as would be the definition of "acquisition expenditure" in section 101(2)(a). Accordingly, giving section 101 its natural meaning, it in effect adds a further condition to those stated in section 48(2) or adds a further category of excluded expenditure to that specified in section 48(3). 
23.	Interpreting section 101(1) as disallowing certain expenditure, which would otherwise fall within section 48, is not only consistent with the statutory language, but also credits the draftsman with an appreciation of the way in which section 48 operated. The draftsman is to be assumed to understand that section 48 operated as a modification of section 42, which remained the relieving provision, and that certain expenditure on the acquisition of a small film could, by virtue of section 48(2)(a) and (c) and (3) fall outside section 48 but still be entitled to relief under section 42. If, therefore, the draftsman had intended that acquisition expenditure excluded from section 48 by section 101 should be excluded from all relief under section 42, it is reasonable to expect that this would have been stated clearly and expressly. On any footing, that has not been done. 
24.	I do not consider that sections 99 and 100 lead to a different conclusion. They are dealing with different matters, and their language is appropriate for their subject matter. They are certainly not inconsistent with an interpretation of section 101 that limits its effect to a restriction on the ambit of expenditure within section 48, leaving the unmodified relief under section 42 available in respect of acquisition expenditure on small films outwith section 48. 
25.	Further, as the Judge emphasised, HMRC's approach to the meaning of section 101 produces a disparity between the treatment of small films and other films for which there is no discernible policy reason. Section 48 was intended to give effect to a policy of promoting small British films over and above British films in general. It therefore conferred in respect of small films the more generous 100 per cent relief rather than the one third relief under the unmodified section 42. The effect of HMRC's interpretation of section 101 is that, rather than restoring parity between large and small films with regard to "non-original" acquisition expenditure, small films were placed in a disadvantageous position compared to large films: there would be no relief at all under section 42 in respect of such expenditure on small films, whereas relief under that section continued to be available in respect of such expenditure on large films. No evidence at all has been adduced of such a policy or the reasons for it. Moreover, any such policy would seem to be at odds with the continuation of the more favourable treatment of small films on first acquisition, for which 100 per cent relief was still permitted. 
26.	Before the Special Commissioners and the Judge, and before us, Mr Peacock relied upon sections 138 and 140 of the Income Tax (Trading and Other Income) Act 2005 ("ITTOIA") in support of Halcyon's interpretation of section 101. The parties do not agree whether ITTOIA is properly characterised as a consolidating statute. It is common ground, however, that ITTOIA chapter 9 (ss. 130-144) was intended to restate the pre-existing provisions governing film relief. Section 48 became section 140 ITTOIA. Section 140 was subject to the limitation previously found in section 101. Section 42 became section 138 ITTOIA, but section 138 was not subject to such a limitation. It is common ground that those successor provisions are consistent with Halcyon's interpretation of section 101 and inconsistent with that of HMRC, and that a taxpayer in the position of Halcyon, acquiring a small film otherwise than by or from the producer, could obtain relief under the statutory successor to section 42. Halcyon submits that, if section 101 is ambiguous, it is legitimate to use ITTOIA as an aid to the interpretation of the inter-relationship between section 42, section 48 and section 101 since the corresponding provisions of ITTOIA are in pari materia with them. For that proposition, Mr Peacock relies on Bennion on Statutory Interpretation (5th ed) section 234 and Golden Bay Cement Co Ltd v CIR [1998] STC 1172, 1179e-f. 
27.	Neither the Special Commissioners nor the Judge considered it appropriate to have regard to ITTOIA in the search for the proper meaning of section 101. I agree with them. Sections 138 and 140 of ITTOIA were never brought into force. The Finance Act 2005, which was passed on 7 April 2005, exactly two weeks after ITTOIA was passed on 24 March 2005, substituted new provisions for ITTOIA chapter 9. The relevant changes took effect immediately for the 2005-2006 tax year and subsequent years of assessment (at least in respect of films not in production at 2 December 2004). So far as relevant, their effect was to bar claims to acquisition relief for small films under the successor to section 42 if they fell within the multiple-dipping counter measures in the successor to section 48. In those circumstances, it would be unsafe to rely upon ITTOIA as giving any clear insight into the meaning and effect of section 101. In any event, for the reasons I have given, section 101 is neither ambiguous nor unclear, so that the principle upon which Halcyon seeks to rely for referring to ITTOIA has no application. 
28.	Finally, Mr Peacock submitted that there is a presumption, applicable in the present case, that a taxpayer is not to be deprived of an existing tax relief in the absence of clear words. He relied on the following statement of Peter Gibson LJ in Carr (Inspector of Taxes) v Armpledge Ltd [2000] STC 410: 
"I return to the judge's reasons. On the first reason, the absence of an express provision in favour of the taxpayer, Lord Goldsmith submitted that the judge's approach was fundamentally wrong. Lord Goldsmith's proposition was that the taxpayer is entitled to take advantage of a relief to the extent and in the manner that he wanted subject only to any express or implied statutory prohibition, such implication only being made where it is necessary and where the statute unambiguously so requires. We were referred to a number of authorities in support of this submission, including Farmer (Inspector of Taxes) v Bankers Trust International Ltd [1990] STC 564, Elliss (Inspector of Taxes) v BP Oil Northern Ireland Refinery Ltd [1985] STC 722 and Collard Inspector of Taxes) v Mining and Industrial Holdings Ltd [1989]STC 384. I did not understand Mr McCall to dispute Lord Goldsmith's proposition. He accepted that it was for the Crown to show that by necessary implication effect had to be given to claims to carry back surplus advance corporation tax for accounting periods in the chronological order of those periods, it being conceded by him that there were no express words on which he could rely for that requirement. "
29.	That statement, which is concerned with whether a tax relief may be utilised by the taxpayer in a manner not expressly prohibited, does not support the existence of any presumption in favour of Halcyon in the present case, which is concerned with the proper meaning and effect of subsequent legislation expressly qualifying a pre-existing relief. Halcyon's right to relief under section 42 does not depend upon any presumption, but upon the interrelationship between section 42, section 48 and section 101 in the light of their express terms. 
Conclusion
30.	For the reasons I have given, I would dismiss this appeal. 
31.	Halcyon served a respondent's notice seeking to uphold the Judge's order on the two further grounds I have discussed in paragraphs 22, 26 and 27 above. It is not necessary to make any separate order on the respondent's notice. 
Lord Justice Rimer
32.	I agree. 
The Chancellor
33.	I also agree.