Gilt repo – purchase and resale of gilts – interest paid to interim holder not required to be paid to original holder but recognised in repurchase price – application of paragraph 15 Schedule 9 FA 96 – related transaction – effect of section 737A to 737C and 730A TA 88 – effect of section 97 … Continue reading DCC Holdings (UK) Ltd v Revenue and Customs: SCIT 8 May 2007
The taxpayer had entered into a ‘repo’ loan to its bank, agreeing to purchase a block of gilt edged securities, and to resell them at a later date at a fixed figure. The profit and figures included an allowance for the interest payments to be made. The company now appealed against being refused permission to … Continue reading Revenue and Customs v DCC Holdings (UK) Ltd: SC 15 Dec 2010
The company had entered into an agreement to purchase gilts, and at the same time to resell them at a future date for a fixed sum. In effect they provided a loan against the gilts. It sought to offset the profit against its trading losses.
The court considered the taxation of ‘repo’ transactions. The revenue had charged to tax, an element of interest paid on a block og gilts purchased by the taxpayer company under a resale agreement at a price which allowed for the interest payments . .