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Ping (Europe) Ltd was an assembler and wholesaler of golf clubs. The Royal & Ancient Golf Club ruled that a certain club manufactured by Ping did not comply with the rules and use of the particular club became illegal. Ping made an offer to owners of the clubs, that they could surrender them, and pay £22 to obtain a new club.
Ping (Europe) Ltd was an assembler and wholesaler of golf clubs. The Royal & Ancient Golf Club ruled that a certain club manufactured by Ping did not comply with the rules and use of the particular club became illegal. Ping made an offer to owners of the clubs, that they could surrender them, and pay £22 to obtain a new club.
Customs said that Ping was supplying new clubs in return for both monetary and non-monetary consideration, and that the value attributable to the old club was the difference between the wholesale price of the new club and the monetary consideration received. They assessed Ping accordingly.
Ping appealed to the tribunal, which agreed that the monetary value attributable to the old club was nil. Customs therefore appealed to the High Court, which also found for Ping.
In the Appeal Court, their lordships said that it was a paradox to say that the return of the old club was consideration, but that the monetary value of that consideration was nil. The submission that the taxpayer had to have attributed a monetary consideration to the old club, as it did not sell them was unsupported. The tribunal and the High Court were right to conclude that the monetary value of the consideration was nil.
Customs' appeal was dismissed.
(Commissioners of Customs and Excise v Ping (Europe) Ltd, Court of Appeal, 31 July 2002.)
