Capital allowances were not available following a business succession on satellite launch costs incurred by the previous business owner prior to the succession, as the satellites were leased and the succession provisions for capital allowances purposes had no application because they required the successor to be the actual owner of the relevant assets.  

The appellant company acquired the business and assets of the International Maritime Satellite Organisation (IMSO). IMSO had previously entered into an agreement with a satellite construction company for the construction of six satellites. However, IMSO never took delivery of the satellites. Instead, financial lessors obtained, by means of novation, the right to delivery of the satellites and the obligation to pay for them.  

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