Category: Corporation Tax

Spring Capital Ltd v Revenue and Customs and Others: FTTTx 10 Feb 2015

FTTTx CORPORATION TAX – deductions for amortisation of goodwill – Schedule 29 FA 2002 – whether goodwill purchased on a transfer of trade in September 2004 or whether a migration of trade – market value of goodwill – principles for determining market value of goodwill on transfer of trade – whether a transfer of trading losses to the appellant under section 343 ICTA 1988 – whether quantum of trading losses can be disputed – effect of undertaking given by HMRC to the Court of Session in other proceedings- construction and effect of the undertaking – Contracts (Third Parties) Act 1999 – whether valid consequential amendment to return to 2008 return under paragraph 34 Schedule 18 FA 1998 – whether valid claims for relief for the purposes of paragraph 51 Schedule 18 FA 1998 – appeals dismissed in relation to deductions for amortisation of goodwill – issue of quantum of losses under section 343 ICTA 1988 adjourned pending outcome of separate appeal by predecessor company

[2015] UKFTT 66 (TC)
Bailii
Contracts (Third Parties) Act 1999
England and Wales

Corporation Tax

Updated: 28 December 2021; Ref: scu.543227

The Prudential Assurance Company Ltd v HM Revenue and Customs: ChD 26 Jan 2015

Consequential judgment after principle findings in litigation as to issues of liability and quantification arising from the alleged or established invalidity under EU law of various aspects of the UK legislation which governed the taxation of ‘portfolio dividends’ (i.e. dividends derived from holdings of less than 10% of the shares in the companies concerned) paid by companies resident either in the EU, or elsewhere in the world (‘third countries’), to corporate shareholders resident in the UK.

Henderson J
[2015] EWHC 118 (Ch)
Bailii
England and Wales

Corporation Tax, European, Litigation Practice

Updated: 27 December 2021; Ref: scu.541758

Spring Salmon and Seafood Ltd v Revenue and Customs: UTTC 29 Oct 2014

UTTC CORPORATION TAX – appeal in FTTx against amendments made by closure notices – jurisdiction – claim for terminal loss relief – denied in closure notices relating to other years – whether jurisdiction to consider the appeal – no – appeal to Upper Tribunal dismissed

[2014] UKUT 488 (TCC), [2014] BTC 529, [2015] STC 563
Bailii
England and Wales

Corporation Tax

Updated: 24 December 2021; Ref: scu.539406

Fidex Limited v Revenue and Customs: UTTC 13 Nov 2014

Procedure – appeal against closure notice – reliance on grounds for amendment not stated in closure notice – Tower McCashback considered Corporation tax – loan relationships – application of paragraph 13 Sch9 FA 1996 to debit arising under para19A

[2014] UKUT 454 (TCC)
Bailii
Finance Act 1996
England and Wales
Citing:
Appeal From – Fidex Ltd v Revenue and Customs FTTTx 2-Apr-2013
FTTTx CORPORATION TAX – loan relationships – debit under paragraph 19A, Schedule 9, Finance Act 1996 in respect of the difference in the accounting value of loan relationships on a change of accounting practice – . .

Cited by:
Appeal from – Fidex Ltd v HM Revenue and Customs CA 21-Apr-2016
‘This appeal is concerned with a tax avoidance scheme called Project Zephyr. The object of this scheme was to create a loss of around 84 million Euros in the hands of the appellant (‘Fidex’) which would be available for group relief throughout the . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax, Taxes Management

Updated: 24 December 2021; Ref: scu.539408

Biffa (Jersey) Ltd v Revenue and Customs: FTTTx 23 Oct 2014

FTTTx CORPORATION TAX – deemed loan transactions under section 730A ICTA 1988 – whether effect of section 195 FA 2003 that acquisition of own shares disregarded for purposes of section 730A – no – alternatively whether section 27 F(No 2)A 2005 applies in relation to andpound;214,108,391 paid by BCHL to BJL on 25 September 2008 – no – appeal dismissed

[2014] UKFTT 982 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 23 December 2021; Ref: scu.538978

Banco Santander And Santusa v Commission: ECFI 7 Nov 2014

ECJ Judgment – State aid – Provisions relating to corporation tax for companies tax resident in Spain to amortize the goodwill resulting from equity investments in companies tax resident abroad – Decision calling this help to plan State declaring the aid incompatible with the common market and ordering its recovery – Concept of State aid – Selective nature – None – – Disregard of Article 107, paragraph 1 Identification of a favored companies by measuring category TFEU

T-399/11, [2014] EUECJ T-399/11, ECLI: EU: T: 2014: 938
Bailii

European, Corporation Tax

Updated: 23 December 2021; Ref: scu.538464

Dock and Let Ltd v Revenue and Customs: FTTTx 8 Oct 2014

CORPORATION TAX – self assessment – enquiry notice given on anniversary date of day on which return filed – whether notice given within 12 months of day when return filed – meaning of word ‘from’ in para 24(2) Sch 18 FA 1998 – held, ‘from’ excluded day when filed – notice therefore validly given – as a result, taxpayer notice under para 1 Sch 36 FA 2008 validly given as Condition A in para 21(4) fulfilled – appeal dismissed and direction given to supply information as specified in Sch 36 notice

[2014] UKFTT 943 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 22 December 2021; Ref: scu.537671

Advanced Scaffolding (Bristol) Ltd v Revenue and Customs (Income Tax/Corporation Tax : Sub-Contractors In The Construction Industry): FTTTx 18 Dec 2018

CONSTRUCTION INDUSTRY SCHEME – penalties for late filing of CIS returns – s 98A Taxes Management Act 1970 – schedule 55 to Finance Act 2009 – proportionality – special circumstances – reasonable excuse – effect of paragraph 17(3) of Schedule 55 to Finance Act 2009 – appeal allowed in part

[2018] UKFTT 744 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 21 December 2021; Ref: scu.632423

Etat belge SPF Finances v Les Vergers Du Vieux Tauves: ECJ 22 Dec 2008

ECJ Corporation taxes – Directive 90/435/EEC – Status of parent company Capital holding Holding of shares in usufruct

[2008] EUECJ C-48/07
Bailii
Directive 90/435/EEC
Citing:
Opinion – Etat belge SPF Finances v Les Vergers Du Vieux Tauves ECJ 3-Jul-2008
ECJ Opinion – Directive 90/435 Parent company Holder of right of usufruct over shares. . .

Lists of cited by and citing cases may be incomplete.

European, Corporation Tax

Updated: 21 December 2021; Ref: scu.537072

Kronos International Inc v Finanzamt Leverkusen: ECJ 11 Sep 2014

ECJ Judgment – Reference for a preliminary ruling – Articles 49 TFEU and 54 TFEU – Freedom of establishment – Articles 63 TFEU and 65 TFEU – Free movement of capital – Tax legislation – Corporation tax – Legislation of a Member State designed to eliminate double taxation of distributed profits – Imputation method applied to dividends distributed by companies resident in the same Member State as the company receiving them – Exemption method applied to dividends distributed by companies resident in a different Member State from the company receiving them or in a third State – Difference in treatment of losses of the company receiving the dividends

C-47/12, [2014] EUECJ C-47/12
Bailii
TFEU 49 54 63 65

European, Corporation Tax

Updated: 21 December 2021; Ref: scu.536562

HM Revenue and Customs v Lloyds TSB Equipment Leasing (No 1) Ltd: CA 30 Jul 2014

LEL had made a claim for writing-down capital allowances at the rate of 25% in respect of expenditure incurred by LEL on the purchase of two merchant vessels, the Arctic Voyager and the Arctic Discoverer, of which it is the owner and lessor. The vessels had been designed and built for the purpose of shipping liquefied natural gas (‘LNG’) from northern Norway to Spain and the USA as part of a project (‘the Snhvit project’) for the exploitation of natural gas fields under the Barents Sea by a consortium of energy companies.

Rimer, Patten, Kitchin LJJ
[2014] EWCA Civ 1062
Bailii
England and Wales

Corporation Tax

Updated: 18 December 2021; Ref: scu.535447

Kahn and Another v Commissioners of Inland Revenue; In re Toshoku Finance plc: HL 20 Feb 2002

A company went into liquidation, being owed substantial sums by another company in the same group, but itself insolvent. A settlement did not include accrued interest, but was claimed to be taxed as if it had, and on an accruals basis. If so, was this an expense properly arising in the insolvency, and payable as a preferred debt?
Held: Debts arising from pre-liquidation were to be proved, but a debt arising in the administration should be paid in full. The issue had been settled by statute. The tax was a proper disbursement in the insolvency, and was payable in full. Whether debts should count as expenses of the liquidation is a matter for the discretion of the court.

Lord Hoffmann Lord Woolf CJ Lord Hutton Lord Hobhouse of Wood-borough Lord Rodger of Earlsferry
Gazette 21-Mar-2002, [2002] UKHL 6, Times 25-Feb-2002, [2002] 1 WLR 671, [2003] 1 AC 1, [2002] 2 All ER 113, [2002] 2 Cr App R 9, [2002] HRLR 23, (2002) 166 JPN 431, (2002) 166 JP 333
House of Lords, Bailii
Income and Corporation Taxes Act 1988 8(2), Finance Act 1996 Ch II, Insolvency Act 1986 115, Insolvency Rules 1986 (SI 1986 No 1925) 4.218(1) 4.220(1)
England and Wales
Citing:
Cited – In re Watson, Kipling and Co ChD 1883
An assessment for rates had been made after the liquidation of the company upon property occupied by the company. The court rejected the submission of counsel for the rating authority that: ‘where a liability is incurred during the winding-up, that . .
Approved – In re Mesco Properties Ltd ChD 1979
The court considered whether corporation tax had to be paid as an expense of the liquidation in priority to other claims. In that case it had arisen not on profits but on chargeable gains, on sales of the company’s properties after the commencement . .
Cited – In re Mesco Properties Ltd CA 1980
Tax legislation provided that the company was chargeable to corporation tax on a capital gain arising in the winding up.
Held: The appeal failed. It was a tax which the liquidator was bound to discharge by payment, and the payment was a . .
Cited – In re London Metallurgical Co 1985
A costs order made against liquidators arising from proceedings they had taken, will usually have priority over the general expenses of the action. The list of expenses said nothing about the costs of litigation incurred by the liquidator or awarded . .
Cited – In re M C Bacon Ltd ChD 1990
A liquidator claimed that the costs of an unsuccessful attempt to set a floating charge aside should be paid out of the assets subject to the charge in priority to the claims of the charge holder.
Held: The rule was a complete statement of the . .
Cited – In re Atlantic Computer Systems Plc CA 1992
The chargor was a company which arranged with the chargee, a funding bank, that it should purchase equipment and let it on hire purchase to the chargor with permission to sub-lease to end users. The chargor charged to the chargee by way of security . .
Cited – Lewis v Commissioner of Inland Revenue and others CA 2-Nov-2000
The liquidator in a creditor’s voluntary liquidation sought a direction that he could take his costs of pursuing former directors in actions for wrongful trading and preferences, out of realised funds. It was held that nothing in the rules or Act . .
Cited – In Re Kentish Homes Ltd ChD 31-Mar-1993
The question was whether a post-liquidation liability to community charge on empty flats was an expense of the liquidation.
Held: The company was the chargeable person in respect of the flats for the relevant periods, but the liability was . .
Cited – In re Exhall Coal Mining Co Ltd CA 1864
Section 163 provided ‘any . . distress or execution put in force against the estate or effects of the company after the commencement of the winding up shall be void to all intents.’ After the presentation of a petition, the commencement of a . .
Cited – In re Progress Assurance Co Ex parte Liverpool Exchange Co CA 1870
Where offices had been let to a company which was ordered to be wound up by the Court, a distress was subsequently put in for rent by the lessors, under which the office furniture was seized.
Held: as possession of the offices had not, in the . .
Cited – In re Lundy Granite Co; Ex parte Heavan CA 1871
The landlord of Lundy Island, which was let to a third party, distrained upon goods of the company which had been left upon the tenant’s property. The distraint was for rent which had fallen due more than a year after the winding up order. The . .
Cited – In re Oak Pits Colliery Co CA 1882
The court examined the basis of the rule that the court has a discretion to order a liquidator to pay the full rent of a property he retained: ‘When the liquidator retains property for the purpose of advantageously disposing of it, or when he . .
Cited – Hardy v Fothergill 1888
Rent falling due after a winding up of the tenant was a future debt for which the landlord could have proved in the tenant’s liquidation. . .
Cited – In re ABC Coupler and Engineering Co Ltd (No 3) ChD 1970
The liquidator when appointed closed down the business which had been conducted on the premises, had the company’s plant and machinery valued and thought about what he should do.
Held: The rent did not become a liquidation expense until some . .
Cited – In re Downer Enterprises Ltd ChD 1974
The company was the assignee of a lease. The rent appears to have been payable in advance on the usual quarter days. The company went into liquidation in November 1971. At some time before April 1972 the liquidator instructed agents to market the . .
Cited – Re HH Realisations Ltd ChD 1975
The liquidator of a company ceased to be liable to pay the rent under the company’s lease in full from the time it gave notice to the landlord that it was seeking authority to disclaim the lease, even though it remained in occupation for nearly two . .
Cited – In re Watson, Kipling and Co ChD 1883
An assessment for rates had been made after the liquidation of the company upon property occupied by the company. The court rejected the submission of counsel for the rating authority that: ‘where a liability is incurred during the winding-up, that . .
Cited – In re National Arms and Ammunition Co CA 1885
‘If the company retains the possession of property which would be rateable in the hands of anyone else, it is only reasonable that it should be rateable in the hands of the company . . the true test is whether there has been a beneficial occupation . .
Cited – In re Blazer Fire Lighter Ltd 1895
The liquidator had closed the business and done nothing on the premises except to instal a caretaker to protect them from vandalism. That was sufficient to continue the company in rateable occupation. So the rates were an expense of the liquidation. . .

Cited by:
Cited – Digital Equipment Co Ltd and Others v Bower and Others ChD 4-Dec-2003
The liquidators had lost their legal action, and had been ordered to pay the present claimants their costs. They sought payment out of an insolvency services account in competition with the solicitors for the liquidators.
Held: An award of . .
Cited – McGrath and Honey v McMahon and Others, Re HIH Casualty and General Insurance Ltd and others CA 9-Jun-2006
The insurance company was to be wound up. It operated internationally but was registered in Australia. The Australian liquidator now sought an order for the transfer of assets held here to Australia.
Held: It was inevitable that cross border . .
Cited – Unadkat and Co (Accountants) Ltd v Bhardwaj and Another ChD 11-Oct-2006
Section 651 was broad enough to enable the court to order that the costs of having the dissolution of a company declared void be treated as an expense in the winding-up, notwithstanding the decision of the House of Lords in Re Toshoku Finance UK plc . .
Cited – Irish Reel Productions Ltd v Capitol Films Ltd ChD 10-Feb-2010
The petitioner’s winding-up petition had been dismissed on the defendant company being put into administration. The petitioner asked for its costs to be paid as an administration expense payable in priority to the administrator’s expenses.
Cited – McCartney and Unite The Union and Another v Nortel Networks UK Ltd (In Administration) ChD 22-Apr-2010
The administrators gave employees of the company notice of termination of their employment. Then administrators refused consent under para 43(6) to actions against the company in the Northern Ireland Industrial Tribunal for protective awards, unfair . .
Cited – In re Nortel Companies and Others SC 24-Jul-2013
The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency.
Held: Liabilities which arose from financial support directions or contribution notices . .
Explained – Bloom and Others v The Pensions Regulator (Nortel, Re) ChD 10-Dec-2010
Applications for directions by the administrators of twenty companies in two groups, all raising the same common questions as to the effect of the Financial Support Direction regime created by the Pensions Act 2004 upon companies in administration . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax, Insolvency, Costs

Updated: 18 December 2021; Ref: scu.167631

Beacon Estates (Chepstow) Ltd v Revenue and Customs: FTTTx 16 Jul 2014

CORPORATION TAX – Loss relief – Yacht chartering business carried out on a commercial basis – Whether it was also carried out with a view to the realisation of profits of trade in the accounting periods for the years ended 31 March 2009 and 2010 (as required by s 393A (3) and (4) of the Income and Corporation Taxes Act 1988) and accounting periods for the years ended 31 March 2011 and 2012 (as required by s 44 Corporation Taxes act 2010) – Yes – Appeal allowed

[2014] UKFTT 686 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 17 December 2021; Ref: scu.535138

Easinghall Ltd v Revenue and Customs: FTTTx 10 Jul 2014

FTTTx Corporation Tax – para 33 Sch 18 FA 98 – application for closure notice – discovery assessment made before enquiry opened – settled by agreement – effect of settlement on scope and possible conclusions of enquiry – Olin v Scorer considered – reasonableness of continuing enquiry

[2014] UKFTT 677 (TC)
Bailii

Corporation Tax

Updated: 17 December 2021; Ref: scu.534269

Nisbet Marine Services Ltd v Revenue and Customs (Income Tax/Corporation Tax : Penalty): FTTTx 19 Dec 2018

Corporation tax – penalties for late filing of Corporation Tax return and late payment of Corporation Tax – Appellant delegated preparation and submission of return to accountant who failed to submit the accounts on time – payment by Appellant of tax to incorrect account (PAYE rather than CT) with HMRC – error by HMRC in not identifying erroneous allocation – whether reasonable excuse – no – appeal dismissed

[2018] UKFTT 753 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 16 December 2021; Ref: scu.632463

Starflex Contractors Ltd v Revenue and Customs: FTTTx 9 Jan 2019

Income Tax/Corporation Tax : Penalty – Corporation tax – company’s failure to notify chargeability to tax – late returns penalties under Schedule 41 Finance Act 2008 – Schedule 18 Finance Act 1998 – director’s loans – penalties under Sections 455 and 458 Corporation Tax Act 2010 – s 7(3) Schedule 4 – whether reasonable excuse – no – whether special circumstances – no – appeal dismissed

[2019] UKFTT 31 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 16 December 2021; Ref: scu.632704

Interfish Ltd v HM Revenue and Customs: CA 27 Jun 2014

The company sought to set payments it had made to support a local rugby club off against its income for Corporation Tax purposes.
Held: The appeal failed. The requirement was that the expenditure be wholly necessarily and exclusively for the requisite purpose. The mixed purpose here did not suffice.

Lord Dyson MR, Moses, Patten LJJ
[2014] EWCA Civ 876
Bailii
Income and Corporation Taxes Act 1988 74
England and Wales
Citing:
At FTTTx – Interfish Ltd v Revenue and Customs FTTTx 13-May-2010
FTTTx Corporation tax – deductibility of expenditure – sponsorship payments intended to improve fortunes of sports club – expectation of trade benefits principally as a result of recognition by others involved . .
At FTTTx – Interfish Ltd v Revenue and Customs FTTTx 4-Apr-2012
FTTTx Corporation tax – deductibility of expenditure – sponsorship payments intended to improve fortunes of sports club – expectation of trade benefits principally as a result of recognition by others involved . .
Appeal from – Interfish Ltd v HM Revenue and Customs UTTC 16-Jul-2013
UTTC Corporation tax – deductibility of expenditure – sponsorship payments intended to improve fortunes of sports club – expectation of trade benefits principally as a result of recognition by others involved . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 15 December 2021; Ref: scu.533206

Agassi v Her Majesty’s Inspector of Taxes: HL 17 May 2006

The tax payer played tennis and was paid sums for when he played in England. The sums were paid to his overseas based company.
Held: The revenue’s appeal succeeded. The ‘legislative intendment in relation to sections 555 and 556, and their statutory predecessors in the 1986 Act, was that foreign entertainers and sportsmen who, or whose controlled companies, receive payments in connection with their commercial activities in the United Kingdom should be subject to the section 18(1)(a)(iii) charge to tax and that the territorial principle cannot be implied so as to limit the effect of the clear language of section 555(2). ‘ Otherwise tax could easily be avoided. (Lord Walker dissenting)

Lord Nicholls of Birkenhead, Lord Hope of Craighead, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Mance
Times 18-May-2006, [2006] UKHL 23
Bailii
Income and Corporation Taxes Act 1988 555 556 557 558, Income Tax (Entertainers and Sportsmen) Regulations 1987 (SI 1987/530)
England and Wales
Citing:
Cited – Ex parte Blain; In re Sawers CA 1-Aug-1879
Where legislation regulates the conduct of an individual, it may be so construed as to limit it to conduct by United Kingdom citizens anywhere.
James LJ referred to ‘broad, general, universal principle that English legislation, unless the . .
Cited – Clark (Inspector of Taxes) v Oceanic Contractors Inc HL 16-Dec-1982
HL Income tax, Schedule E – Non-resident employer – Employees working in U.K. sector of North Sea – Whether employer liable to deduct tax from emoluments – Income Tax (Employments) Regulations 1973 – Income and . .
At First instance – Agassi v S Robinson (HM Inspector of Taxes) ChD 17-Mar-2004
The non-resident tennis player taxpayer appealed a charge to tax in respect of payments made for his sporting activities within the UK, made by overseas companies to other overseas companies owned by the taxpayer.
Held: The Act provided that . .
Appeal From – Agassi v Robinson (Inspector of Taxes) CA 19-Nov-2004
. .
Se Also – Andre Agassi v S Robinson (H M Inspector of Taxes) (No 2) CA 2-Dec-2005
The taxpayer had been represented in proceedings throughout by tax law experts, Tenon Media, who were not legally admitted, but had a right to conduct litigation under the 1990 Act. The Inspector objected to paying costs as if the representatives . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 10 December 2021; Ref: scu.241831

Pirelli Cable Holding NV and Others v Inland Revenue Commissioners: ChD 22 Jan 2003

The Metallgesellschaft case had established that it was contrary to European law to withhold the right to ACT on dividends paid by a UK holding company to a non-Uk subsidiary. The Revenue claimed that that rule did not apply here because the non-Uk subsidiary operated from a country with a double taxation agreement with the UK.
Held: The Commissioners case was wrong. The receipt of payments in the Netherlands of tax credits did not operate to extinguish the right to payments within the UK. Those receipts were not countervailing advantages sufficient to justify the refusal of the tax credits within the UK.

Park J
Times 29-Jan-2003, [2003] EWHC 32 (Ch), Gazette 20-Mar-2003, [2003] STC 250
Bailii
Income and Corporation Taxes Act 1988 247
England and Wales
Citing:
Cited – Metallgesellschaft Ltd and Others v Inland Revenue Commissioners and Another Hoechst Ag and Another v Same ECJ 8-Mar-2001
The British law which meant that non-resident parent companies of British based businesses were not able to recover interest on payments of advance corporation tax, was discriminatory against other European based companies. Accordingly the law was . .

Cited by:
Appeal from – Pirelli Cable Holding NV and others v The Commissioners of Inland Revenue CA 16-Dec-2003
. .
At first Instance – Pirelli Cable Holding Nv and others v Inland Revenue HL 8-Feb-2006
Under s247 of the 1988 Act, a company paying dividends to a parent company need not withhold ACT. This option was not offered where either subsidiary or parent was not UK resident until the decision in Hoechst which found the restriction contrary to . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax, European

Updated: 06 December 2021; Ref: scu.178784

GMGRM North Ltd and Others, Regina (on The Application of) v Ritchie (Revenue and Customs) and Another: CA 19 Jun 2014

Appellants’ renewed application for permission to appeal against an order refusing permission to apply for judicial review of the decision of the respondents in which they refused to exercise their statutory discretion to permit adjustments to claims made for corporation tax group relief outside the ordinary statutory time limits for such claims provided for in the Finance Act 1998.

[2014] EWCA Civ 844
Bailii
Finance Act 1998
England and Wales

Corporation Tax

Updated: 04 December 2021; Ref: scu.526736

Commission of The European Communities v Kingdom of Belgium: ECJ 8 May 2008

ECJ (Judgment Of The Court (Seventh Chamber)) Failure of a Member State to fulfil obligations – Directive 2005/19/EC – Common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States – Failure to transpose within the prescribed period

C-392/07, [2008] EUECJ C-392/07
Bailii
Directive 2005/19/EC

European, Corporation Tax, Stamp Duty

Updated: 04 December 2021; Ref: scu.526316

Greene King Plc and Another v Revenue and Customs: UTTC 22 Apr 2014

CORPORATION TAX – loan relationship – assignment of right to interest under the loan to another group company – effect of assignment on recognition of loan in accounts of assignor company – proper application of loan relationship provisions to the assignee company

[2014] UKUT 178 (TCC)
Bailii
England and Wales

Corporation Tax

Updated: 03 December 2021; Ref: scu.525883

Commission v Electricite de France: ECJ 5 Jun 2012

ECJ (Grand Chamber) Appeal – State aid – Waiver of a tax claim – Exemption from corporation tax – Increase in share capital – Conduct of a State acting as a prudent private investor in a market economy – Criteria to distinguish between the State as shareholder and the State exercising public power – Definition of ‘reference private investor’ – Principle of equal treatment – Burden of proof

V Skouris, P
C-124/10, [2012] EUECJ C-124/10 – P
Bailii
European
Citing:
See Also – Commission v Electricite de France ECJ 2-Sep-2010
ECJ (Order) – Intervention – EFTA Surveillance Authority – Article 40, second and third paragraphs of the Statute of the Court’ . .
See Also – Commission v Electricite de France ECJ 20-Oct-2011
ECJ Opinion – State Aid – Appeal – State aid – Selective tax exemption linked to an increase in share capital during the recapitalisation of an undertaking – Market economy investor principle – State acting as . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 02 December 2021; Ref: scu.523885

Hargreaves Property Holdings Ltd v Revenue and Customs: FTTTx 2 Nov 2021

CORPORATION TAX – whether interest paid by a UK resident company out of assets situated in the United Kingdom under a debt which, if enforced, would be enforced against assets situated in the United Kingdom had a UK source regardless of where the credit giving rise to the debt was extended and notwithstanding provisions in the loan agreement requiring the interest to be paid outside the United Kingdom, specifying that the governing law was to be that of a jurisdiction outside the United Kingdom and specifying that that non-UK jurisdiction was to be the exclusive jurisdiction for enforcement – yes – whether interest on short-term loans which were repaid within a year out of the proceeds of new loans from the same lenders in circumstances where, on the balance of probabilities, the series of loans were intended to provide long-term funding for the borrower was yearly in nature – yes – whether the Appellant could rely on the – industrial or commercial profits – in the UK/Guernsey double tax treaty to make interest payments to a Guernsey resident company without withholding – not without the making of a claim and the issue of a direction – whether the Appellant could rely on the exemption from withholding tax for interest to which a UK resident company was beneficially entitled when the recipient acquired the interest only just before the interest payment was made and did so for no purpose other than availing itself of the exemption – except to the (de minimis) extent that an interest payment received exceeded the amount paid for the right to receive that interest payment, no-‘ IRC v McGuckian applied

[2021] UKFTT 390 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 01 December 2021; Ref: scu.669781

Rewe Zentralfinanz eG, as universal legal successor of ITS Reisen GmbH v Finanzamt Koln-Mitte: ECJ 29 Mar 2007

ECJ Freedom of establishment – Corporation tax – Immediate offsetting of losses incurred by parent companies – Losses stemming from write-downs to the book value of shareholdings in subsidiaries established in other Member States

CWA Timmermans, P
C-347/04, [2007] EUECJ C-347/04
Bailii
Citing:
Opinion – Rewe Zentralfinanz eG, as universal legal successor of ITS Reisen GmbH v Finanzamt Koln-Mitte ECJ 31-May-2006
ECJ (Opinion) Tax legislation – Corporation tax – Offsetting of losses by parent companies – Losses due to a fall in the value of shares held in subsidiaries established in other Member States . .

Lists of cited by and citing cases may be incomplete.

European, Corporation Tax

Updated: 29 November 2021; Ref: scu.521105

DMC v Finanzamt Hamburg-Mitte (Judgment of The Court): ECJ 23 Jan 2014

Taxation – Corporation tax – Transfer of an interest in a partnership to a capital company – Book value – Value as part of a going concern – Agreement on the prevention of double taxation – Immediate taxation of unrealised capital gains – Different treatment – Restriction on free movement of capital – Preserving the balanced allocation of powers to impose taxes between the Member States – Proportionality

C-164/12, [2014] EUECJ C-164/12, [2014] BTC 16, [2014] 2 CMLR 47, ECLI:EU:C:2014:20, [2014] STC 1345
Bailii

European, Corporation Tax

Updated: 29 November 2021; Ref: scu.520796

Versteegh Ltd and Others v Revenue and Customs: FTTTx 6 Nov 2013

FTTTx CORPORATION TAX – tax avoidance scheme designed to achieve loan relationship debit in borrowing company in a group without a corresponding tax charge in any other group company – loan structured to provide a return in the form of preference shares issued by the borrower, not to the lender but to another group company (the share recipient)
Lead case issues: (1) was the lender taxable under FA 1996 (loan relationships)- application of FRS 5 to the accounts of the lender – was the lender taxable under s 786 ICTA – effect of s 80(5) FA 1996; (2) was the share recipient taxable on its receipt of the preference shares under Case VI of Schedule D; and (3) on the limited basis of the question put to the tribunal, did the unallowable purposes rule in FA 1996, Sch 9, para 13 result in the borrower’s debit in respect of the issue of the preference shares under the loan agreement not being taken into account under FA 1996

[2013] UKFTT 642 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 26 November 2021; Ref: scu.518634

A Oy: ECJ 21 Feb 2013

ECJ Freedom of establishment – Article 49 TFEU – Tax legislation – Merger of a parent company established in one Member State with a subsidiary established in another Member State – Deductibility by the parent company of the subsidiary’s losses arising from its activity – Exclusion for non-resident subsidiaries

L Bay Larsen P
[2013] EUECJ C-123/11, C-123/11
Bailii
Citing:
Opinion – A Oy ECJ 19-Jul-2012
ECJ Opinion – Tax law – Freedom of establishment – Directive 2009/133/EEC – National income tax law – Merger of two companies resident in different Member States – Deductibility of losses of the transferring . .

Cited by:
Cited – Revenue and Customs v Marks and Spencer Plc SC 22-May-2013
The company wished to assign losses in its European subsidiaries against its profits. Since the losses were first claimed, the subsidiaries had gone into insolvent liquidation.
Held: Lord Hope said: ‘I would answer the first issue by rejecting . .

Lists of cited by and citing cases may be incomplete.

European, Corporation Tax

Updated: 26 November 2021; Ref: scu.518019

DCC Holdings (UK) Ltd v Revenue and Customs: SCIT 8 May 2007

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 FA 96 – approach to section84 FA 96 – section 86 FA 96 determining which authorised accounting method to use.

Charles Hellier
[2007] UKSPC SPC00611, [2007] STI 1649, [2007] STC (SCD) 592
Bailii
Finance Act 1996 84(1), Income and Corporation Taxes Act 1988 730A 737A
England and Wales
Cited by:
Appeal from – DCC Holdings (UK) Ltd v HM Revenue and Customs ChD 17-Oct-2008
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 . .
At Special Commissioners – Revenue and Customs v DCC Holdings (UK) Ltd CA 10-Nov-2009
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.
At Special Commissioners – Revenue and Customs v DCC Holdings (UK) Ltd SC 15-Dec-2010
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. . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 23 November 2021; Ref: scu.253403

Irish Bank Resolution Corporation Ltd v Revenue and Customs: CA 28 Aug 2020

[2020] EWCA Civ 1128
Bailii
England and Wales
Citing:
Appeal from UTTC – Irish Bank Resolution Corporation Ltd and Another v Revenue and Customs UTTC 9-Oct-2019
CORPORATION TAX – UK branches of Irish banks – interest expense – whether deductible – attribution of notional capital – ICTA section 11AA(3)(b) – construction and application of UK – Ireland DTC. . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 23 November 2021; Ref: scu.653360

Peninsular and Oriental Steam Navigation Co v Revenue and Customs: UTTC 19 Jun 2015

CORPORATION TAX – double taxation relief – dividend paid to related company – share subscription by overseas company in UK subsidiary – shares almost immediately cancelled with reduction of capital – subscription money credited to reserves – reserves then paid by way of dividend to overseas company – no UK tax borne by reserves – onward dividend paid to UK holding company – liability for Case V tax – whether ICTA s 801(4B) to be applied to ‘underlying tax’ – no – appeal dismissed

[2015] UKUT 312 (TCC), [2015] STC 2393, [2015] BTC 520, [2015] STI 2027
Bailii
England and Wales

Corporation Tax

Updated: 19 November 2021; Ref: scu.553180

Spring Salmon and Seafood Ltd v Revenue and Customs: FTTTx 24 May 2013

CORPORATION TAX – appeal against amendments made by closure notices – jurisdiction – claim for terminal loss relief – denied in closure notices relating to other years not under appeal – whether jurisdiction to consider in this appeal – no – claim that tax already paid – amended to ‘nil’ by closure notices under appeal – whether jurisdiction – yes subject to undetermined point on abuse of process

[2013] UKFTT 320 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 17 November 2021; Ref: scu.513462

Peninsular and Oriental Steam Navigation Company v Revenue and Customs: FTTTx 29 May 2013

FTTTx CORPORATION TAX – double taxation relief – dividends paid between related companies: relief for UK and underlying taxes – ‘rate-boosting’ – Australian subsidiary of claimant company held all shares in UK unlimited company – Australian subsidiary subscribed for further shares in unlimited company – cancellation of those further shares and reduction of capital by unlimited company – subscription monies relating to cancelled shares credited to reserves – reserves represented by subscription monies released by way of ‘interim dividend’ to Australian Company – no UK tax borne on reserves out of which ‘interim dividend’ was paid – whether section 801(4B) of ICTA 1988 applied to increase underlying tax available for credit in hands of claimant company – no – appeal dismissed

[2013] UKFTT 322 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 17 November 2021; Ref: scu.513458

Purolite International Ltd v Revenue and Customs: FTTTx 25 Jul 2012

CORPORATION TAX – trading profits – deductibility of expenses – contribution by UK member of group to legal costs of prosecution in United States of directors and US parent company for alleged violations of Cuban embargo – whether for purposes of UK company’s trade – on facts, held no – whether decision to allocate costs as between US and UK companies taken by same directors solely in interests of UK company – no – held that expenditure not incurred wholly and exclusively for purposes of UK company’s trade – appeal dismissed

[2012] UKFTT 475 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 17 November 2021; Ref: scu.466054

Scotts Atlantic Management Ltd and Others v Revenue and Customs: FTTTx 13 May 2013

FTTTx Corporation tax – whether value contributed to Employee Benefit Trusts was deductible for corporation tax purposes – whether director was chargeable to income tax on benefits made available to him – if there was a PAYE liability on the companies, whether that could be traced to the director under Regulation 72 – whether the corporation tax deduction (if allowable on general principles) was denied by paragraph 1 Schedule 24 FA 2003 in the event that the benefits were not taxable as emoluments or earnings of the director – Corporation tax appeal dismissed – Income tax appeal allowed

[2013] UKFTT 299 (TC)
Bailii

Corporation Tax

Updated: 17 November 2021; Ref: scu.513460

Blenheims Estate and Asset Management Ltd v Revenue and Customs: FTTTx 8 May 2013

FTTTx CORPORATION TAX – debit for accounting charge in respect of amortisation of goodwill – whether goodwill acquired from a related party where transfer of goodwill effected as part of wider transaction under which transferor’s shareholding in claimant company was subject to purchase and option arrangements – claimant company arguing for purposive construction of commencement provisions – paragraph 118(1)(b) of Schedule 29, Finance Act 2002 – transferor was related party in relation to claimant company at time it acquired the goodwill – claimant company not entitled to debit – appeal dismissed

Sadler TJ
[2013] UKFTT 290 (TC)
Bailii

Corporation Tax

Updated: 17 November 2021; Ref: scu.513436

Supaglazing Ltd v Revenue and Customs: FTTTx 10 Dec 2018

Income Tax/Corporation Tax : Assessment/Self-Assessment – discovery assessments – whether or not HMRC able to raise discovery assessments on the grounds of carelessness – director of appellant genuinely believed the return to be correct – whether reasonable for her to hold that belief – held not – whether carelessness by accountant – held yes – appeal dismissed

[2018] UKFTT 712 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 12 November 2021; Ref: scu.632478

TSD Design Development Engineering Ltd v Revenue and Customs: FTTTx 4 Apr 2012

CORPORATION TAX – voluntary disclosure giving rise to increased tax liability interest and penalties – managing director aware of fraud allegedly perpetrated by company secretary – withdrawal of profits treated as loans under s 419 ICTA 1988 – company properly assessed to tax – appeal dismissed

[2012] UKFTT 247 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 12 November 2021; Ref: scu.462720

Partito Media Services Ltd v Revenue and Customs: FTTTx 10 Apr 2012

Corporation tax – Notice to File and fixed rate penalties sent to the company’s former registered office – whether validly served – no – tax-related penalty validly served – whether reasonable excuse – yes – whether penalty charged for failure to notify – no – appeal allowed and penalties set aside

[2012] UKFTT 256 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 12 November 2021; Ref: scu.462709

Elsina Ltd v Revenue and Customs: FTTTx 14 Jan 2015

FTTTx CORPORATION TAX – self assessment – returns – penalties – potential lost revenue – substantial losses – whether no reasonable prospect of losses being used to reduce tax liability – burden of proof – extent of evidence – held, in absence of sufficient evidence, that requirement in para 7(5) Sch 24 FA 2007 not met – penalties due – no basis for suspension of penalties – appeal dismissed

[2015] UKFTT 14 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 11 November 2021; Ref: scu.541506

Commission v United Kingdom: ECJ 3 Feb 2015

ECJ (Judgment) Failure of a Member State to fulfil obligations – Article 49 TFEU – Article 31 of the EEA Agreement – Corporation tax – Groups of companies – Group relief – Transfer of losses sustained by a non-resident subsidiary – Conditions – Date to be used for determining whether the losses of the non-resident subsidiary are definitive

V. Skouris, P
C-172/13, [2015] EUECJ C-172/13, ECLI:EU:C:2015:50
Bailii
European

European, Corporation Tax

Updated: 11 November 2021; Ref: scu.542232

Itelcar – Automoveis De Aluguer Lda v Fazenda Publica: ECJ 3 Oct 2013

ECJ Free movement of capital – Tax legislation – Corporation tax – Interest paid by a resident company on funds lent by a company established in a non-member country – Existence of ‘special relations’ between those companies – Thin capitalisation rules – No right of deduction in relation to interest on the part of the overall debt regarded as excessive – Interest deductible if paid to a company resident in the national territory – Tax evasion and avoidance – Wholly artificial arrangements – Arm’s length terms – Proportionality

ECLI:EU:C:2013:629, [2013] EUECJ C-282/12
Bailii
European

Corporation Tax

Updated: 11 November 2021; Ref: scu.516348

The Commissioners For Her Majesty’s Revenue and Customs v Philips Electronics Uk Ltd: ECJ 6 Sep 2012

hmrc_philipsECJ2012

ECJ Freedom of establishment – Tax legislation – Corporation tax – Tax relief – National legislation excluding the transfer of losses incurred in the national territory by a non-resident branch of a company established in another Member State to a company of the same group established in the national territory

J-C Bonichot R
C-18/11, [2012] EUECJ C-18/11
Bailii

European, Corporation Tax

Updated: 11 November 2021; Ref: scu.464423

Shop Direct Group and Others v Revenue and Customs: FTTTx 14 Feb 2012

FTTTx Corporation tax – receipts of payments in respect of overpaid VAT and statutory interest – whether VAT repayments trading receipts – whether payments in respect of supplies made in discontinued trades chargeable to tax as post-cessation receipts – ICTA 1988, ss 103 and 106(2) – whether payments in respect of interest taxable under Sch D, Case III – loan relationships rules – whether a ‘money debt’ – FA 1996, s 100

Roger Berner J
[2012] UKFTT 127 (TC)
Bailii
Income and Corporation Taxes Act 1988 103 106
England and Wales
Cited by:
Appeal from – Shop Direct Group, Littlewoods Retail Ltd and Others v HMRC UTTC 19-Apr-2013
UTTC Corporation Tax: Effect of receipt by trader or successor to trade of sums in respect of VAT repaid under s80 VATA to representative member of VAT group plus interest paid under s78 VATA. Question of . .
At FTTTx – Shop Direct Group and Others v HM Revenue and Customs ChD 19-Apr-2013
. .
At FTTTx – Shop Direct Group v Revenue and Customs CA 11-Mar-2014
The company sought to challenge the assessment to corporation tax of a very large repayment of VAT, together with an even larger amount of interest.
Held: The appeal failed. . .
At FTTTx – Shop Direct Group v Revenue and Customs SC 17-Feb-2016
The Court considered the interpretation of the sections which applied corporation tax to post-cessation receipts. Companies had received from the Inland Revenue substantial repayments of VAT together with interest. There had been reorganisations of . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 11 November 2021; Ref: scu.451988

Deutsche Morgan Grenfell Group Plc v Inland Revenue and Another: HL 25 Oct 2006

The tax payer had overpaid Advance Corporation Tax under an error of law. It sought repayment. The revenue contended that the claim was time barred.
Held: The claim was in restitution, and the limitation period began to run from the date when the claimants discovered their mistake. The appellants had submitted that section 33 of the 1973 Act provided the second of only two remedies for recovery of tax paid under a mistake of law. The first remedy was said to be a common law right to recover tax unlawfully demanded, of which Lord Walker of Gestingthorpe said: ‘When parliament enacts a special regime providing special rights and remedies, that regime may (but does not always) supersede and displace common law rights and remedies (or more general statutory rights and remedies). Whether it has that effect is a question of statutory construction.’
Lord Hoffmann said: ‘The answer, at any rate for the moment, is that unlike civilian systems, English law has no general principle that to retain money paid without any legal basis (such as debt, gift, compromise, etc) is unjust enrichment. In the Woolwich case [1993] AC 70, 172 Lord Goff said that English law might have developed so as to recognise such a general principle – the condictio indebiti of civilian law – but had not done so. In England, the claimant has to prove that the circumstances in which the payment was made come within one of the categories which the law recognizes as sufficient to make retention by the recipient unjust. Lord Goff provided a list in the Woolwich case at pp 164-165 and the decision itself added another. [i.e. money paid by way of tax to a public body which was acting ultra vires]’

Lord Hoffmann, Lord Hope of Craighead, Lord Scott of Foscote, Lord Walker of Gestingthorpe and Lord Brown of Eaton-under-Heywood
Times 26-Oct-2006, [2006] UKHL 49, [2007] 1 AC 558, [2006] BTC 781, [2007] Eu LR 226, [2007] 1 CMLR 14, [2006] STI 2386, [2006] 3 WLR 781, [2007] 1 All ER 449
Bailii, HL
Limitation Act 1980 32(1), Taxes Management Act 1973 33
England and Wales
Citing:
Cited – Meadows v Grand Junction Waterworks Company 1905
. .
Cited – Woolwich Equitable Building Society v Inland Revenue Commissioners (2) HL 20-Jul-1992
The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. . .
Cited – Henderson v Merrett Syndicates Ltd HL 25-Jul-1994
Lloyds Agents Owe Care Duty to Member; no Contract
Managing agents conducted the financial affairs of the Lloyds Names belonging to the syndicates under their charge. It was alleged that they managed these affairs with a lack of due careleading to enormous losses.
Held: The assumption of . .
Cited – Marcic v Thames Water Utilities Limited HL 4-Dec-2003
The claimant’s house was regularly flooded by waters including also foul sewage from the respondent’s neighbouring premises. He sought damages and an injunction. The defendants sought to restrict the claimant to his statutory rights.
Held: The . .
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – National Provincial Bank Limited v Ainsworth HL 1965
The significance of the distinction between occupation and rights was that although the deserted wife was in actual occupation of the former matrimonial home, the quality of her rights was not such as to be capable of amounting to an overriding . .
Cited – Metallgesellschaft Ltd and Others v Inland Revenue Commissioners and Another Hoechst Ag and Another v Same ECJ 8-Mar-2001
The British law which meant that non-resident parent companies of British based businesses were not able to recover interest on payments of advance corporation tax, was discriminatory against other European based companies. Accordingly the law was . .
At First Instance – Deutsche Morgan Grenfell Group Plc v The Commissioners of Inland Revenue, HM Attorney General ChD 18-Jul-2003
The taxpayer sought to bring an action for restitution by the revenue of sums paid under a mistake of law. Under the Metallgesellschaft decision, rights of election for recovery of overpaid tax applied only between UK resident companies.
Held: . .
Appeal from – Inland Revenue and Another v Deutsche Morgan Grenfell Group Plc CA 4-Feb-2005
The company sought repayment of excess advance corporation tax payments made under a mistake of law. The question was the extent of the effect of the ruling in Klienwort Benson, in particular whether it covered sums paid as taxation, and how the law . .

Cited by:
Cited – Total Network Sl v Customs and Excise Commissioners CA 31-Jan-2007
The defendants suspected a carousel VAT fraud. The defendants appealed a finding that there was a viable cause of action alleging a ‘conspiracy where the unlawful means alleged is a common law offence of cheating the public revenue’. The defendants . .
Cited – Awoyomi v Radford and Another QBD 12-Jul-2007
The claimant sought damages from the defendant barristers who had represented her in criminal proceedings. They had not passed on to her the statement made by the judge in chambers that if she pleaded guilty he would not impose a sentence of . .
Cited – Sempra Metals Ltd v Inland Revenue Commissioners and Another HL 18-Jul-2007
The parties agreed that damages were payable in an action for restitution, but the sum depended upon to a calculation of interest. They disputed whether such interest should be calculated on a simple or compound basis. The company sought compound . .
Cited – Somerville v Scottish Ministers HL 24-Oct-2007
The claimants complained of their segregation while in prison. Several preliminary questions were to be decided: whether damages might be payable for breach of a Convention Right; wheher the act of a prison governor was the act of the executive; . .
Cited – Total Network Sl v Revenue and Customs HL 12-Mar-2008
The House was asked whether an action for unlawful means conspiracy was available against a participant in a missing trader intra-community, or carousel, fraud. The company appealed a finding of liability saying that the VAT Act and Regulations . .
Cited – Fender (Administrator of FG Collier and Sons Ltd) v National Westminster Bank Plc ChD 26-Sep-2008
The administrator sought declarations as to whether to treat the bank as a secured or unsecured creditor.
Held: The court directed the Administrator to recognise the Bank as a secured creditor, as if the Deed of Release had never been . .
Cited – McE, Re; McE v Prison Service of Northern Ireland and Another HL 11-Mar-2009
Complaint was made that the prisoner’s privileged conversations with his solicitors had been intercepted by the police.
Held: The Act made explicit provisions allowing such interception and set out the appropriate safeguards. The interceptions . .
Cited – Kommune and Another v DEPFA Acs Bank ComC 4-Sep-2009
Local authorities in Denmark sought to recover sums paid to the defendant banks for swap trading, saying that the payments had been outwith their powers. . .
Cited – Child Poverty Action Group, Regina (on the Application of) v Secretary Of State for Work and Pensions CA 14-Oct-2009
CPAG appealed against a refusal of a declaration that the respondent could use only the 1992 Act to recover overpayment of benefits where there had been neither misrepresentation nor non-disclosure.
Held: The appeal succeeded, and the court . .
Cited – The Child Poverty Action Group v Secretary of State for Work and Pensions SC 8-Dec-2010
The Action Group had obtained a declaration that, where an overpayment of benefits had arisen due to a miscalculation by the officers of the Department, any process of recovering the overpayment must be by the Act, and that the Department could not . .
Cited – Test Claimants In The Franked Investment Income Group Litigation v Inland Revenue SC 23-May-2012
The European Court had found the UK to have unlawfully treated differently payment of franked dividends between subsidiaries of UK companies according to whether all the UK subsidiaries were themselves UK based, thus prejudicing European . .
Cited – Zurich Insurance Plc UK Branch v International Energy Group Ltd SC 20-May-2015
A claim had been made for mesothelioma following exposure to asbestos, but the claim arose in Guernsey. Acknowledging the acute difficultis particular to the evidence in such cases, the House of Lords, in Fairchild. had introduced the Special Rule . .
Cited – Marine Trade Sa v Pioneer Freight Futures Co Ltd Bvi and Another ComC 29-Oct-2009
The parties stood to make substantial losses against each other under contracts for differences after the dramatic fall in the freight market in the financial turmoil of late 2008. . .
Cited – Littlewoods Ltd and Others v Commissioners for Her Majesty’s Revenue and Customs SC 1-Nov-2017
The appellants had overpaid under a mistake of law very substantial sums in VAT over several years. The excess had been repaid, but with simple interest and not compound interest, which the now claimed (together with other taxpayers amounting to 17 . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax, Limitation, Equity, Taxes Management

Leading Case

Updated: 11 November 2021; Ref: scu.245608

HM Revenue and Customs v Bristol and West Plc: CA 27 Apr 2016

The Court was asked as to the appropriate Corporation Tax treatment of the novation of a portfolio of ‘in the money’ interest-rate swaps (‘the Novation’) to another company in the same group, Bank of Ireland Business Finance Limited for a premium of andpound;91 million, and the validity of a notice issued by the revenue.
Held: The email from the revenue was enough to invalidate the notice. The revenue had no capacity to both issue and suspend operation of a closure notice.

Black, Briggs, David Richards LJJ
[2016] EWCA Civ 397, [2016] WLR(D) 239
Bailii, WLRD
Finance Act 1998
England and Wales

Corporation Tax, Taxes Management

Updated: 10 November 2021; Ref: scu.563070

Easow and Others v Revenue and Customs: FTTTx 18 Sep 2013

FTTTx INCOME TAX – discovery assessments – whether made within time limits – which time limits applied – whether conduct of respective appellants fraudulent or negligent – whether in relation to subsequent assessments their conduct negligent or deliberate – held, assessments made within time – assessments confirmed – penalties confirmed – appeals dismissed
CORPORATION TAX – discovery assessments – whether within time limits – which time limits applied – whether conduct of company and directors fraudulent or negligent – held, assessments made within time – assessments confirmed – assessments under s 419 ICTA 1988 confirmed – penalties confirmed – appeal dismissed

[2013] UKFTT 493 (TC)
Bailii
England and Wales

Income Tax, Corporation Tax

Updated: 10 November 2021; Ref: scu.516294

Marks and Spencer v David Halsey (Inspector of Taxes): ECJ 13 Dec 2005

ECJ Articles 43 EC and 48 EC – Corporation tax – Groups of companies – Tax relief – Profits of parent companies – Deduction of losses incurred by a resident subsidiary- Allowed – Deduction of losses incurred in another Member State by a non-resident subsidiary – Not included.
Article 43 EC did not preclude provisions of a Member State which prevented a resident parent company from claiming group relief for losses incurred by a subsidiary established in another Member State. The restriction was justified by three grounds when taken together: preserving the balanced allocation of the power to impose taxes between Member States; preventing losses being taken into account twice in different Member States; and preventing the risk of tax avoidance if the taxpayer were to be free to choose the Member State in which to claim relief.
As to the proportionality of the restriction, however, the ECJ went on to say this:
‘In that regard, the Court considers that the restrictive measure at issue in the main proceedings goes beyond what is necessary to attain the essential part of the objectives pursued where:
– the non-resident subsidiary has exhausted the possibilities available in its State of residence of having the losses taken into account for the accounting period concerned by the claim for relief and also for previous accounting periods, if necessary by transferring those losses to a third party or by offsetting the losses against the profits made by the subsidiary in previous periods, and
– there is no possibility for the foreign subsidiary’s losses to be taken into account in its state of residence for future periods either by the subsidiary itself or by a third party, in particular where the subsidiary has been sold to that third party.
Where, in one Member State, the resident parent company demonstrates to the tax authorities that those conditions are fulfilled, it is contrary to article 43 EC and 48 EC to preclude the possibility for the parent company to deduct from its taxable profits in that Member State the losses incurred by its non-resident subsidiary.’

V Skouris, P
C-446/03, [2005] EUECJ C-446/03, Times 15-Dec-2005, [2006] CEC 299, [2006] BTC 318, 8 ITL Rep 358, [2006] Ch 184, [2005] ECR I-10837, [2006] 1 CMLR 18, [2006] STI 41, [2006] All ER (EC) 255, [2006] 2 WLR 250, [2006] STC 237
Bailii
Income and Corporation Taxes Act 1988 402, Article 43 EC
European
Citing:
Reference from – Marks and Spencer Plc v Halsey (Inspector of Taxes) 2003
Marks and Spencer Plc appealed against the refusal of group relief, on the ground that the statutory limitations on the territorial scope of group relief were incompatible with, and overridden by, Community law. The Special Commissioners dismissed . .
See Also – Marks and Spencer Plc v Halsey (HM Inspector of Taxes) ChD 2-May-2003
Order requiring reference to ECJ. . .

Cited by:
At ECJ – Halsey (HM Inspector of Taxes) v Marks and Spencer Plc CA 20-Feb-2007
The inspector appealed against a decision granting group relief to the taxpayer a UK resident company for losses by a group company in another European state.
Held: The appeal was denied. To refuse group relief in these circumstances would be . .
At ECJ – Marks and Spencer plc v Halsey (Inspector of Taxes) ChD 10-Apr-2006
The court considered the implementation of the ECJ decision between the parties.
Held: The matter was to be remitted to the Special Commissioners. The ‘no possibilities’ test referred to in the ECJ’s judgment required an analysis of the . .
At ECJ – HM Revenue and Customs v Marks and Spencer Plc CA 14-Oct-2011
The taxpayers claimed relief for losses incurred within their European subsidiaries. The claim having been referred to the ECJ, Moses LJ summarised the issues outstanding: ‘(i) Is the test that the ECJ established to identify those circumstances in . .
At ECJ – Revenue and Customs v Marks and Spencer Plc SC 22-May-2013
The company wished to assign losses in its European subsidiaries against its profits. Since the losses were first claimed, the subsidiaries had gone into insolvent liquidation.
Held: Lord Hope said: ‘I would answer the first issue by rejecting . .
At ECJ – Marks and Spencer Plc v Halsey (HM Inspector of Taxes) ChD 10-Apr-2006
Preliminary judgment. . .
At ECJ – Revenue and Customs v Marks and Spencer Plc SC 19-Feb-2014
For the purposes of corporation tax, MandS claimed group relief in respect of losses sustained by two of their subsidiaries, resident in Germany and in Belgium. Lord Hope observed that the claims were originally made and refused by HMRC over ten . .

Lists of cited by and citing cases may be incomplete.

European, Corporation Tax

Leading Case

Updated: 10 November 2021; Ref: scu.235939

Peninsular and Oriental Steam Navigation Company v Revenue and Customs: CA 20 May 2016

‘This judgment is about the tax effectiveness of a ‘rate-boosting’ scheme (‘the Scheme’), that is, a scheme to boost claims to double tax credit relief (‘DTR’) in the hands of a UK parent company (‘the UK ultimate parent’) on a dividend (‘a Case V dividend’) received by it from any of its overseas subsidiaries and originating from another UK resident company (‘the UK subsidiary’). A Case V dividend is taxable under Case V of schedule D to the Income and Corporation Taxes Act 1988 (‘ICTA’). The UK ultimate parent is entitled to credit for foreign tax suffered by the paying company (‘the paying subsidiary’) and its subsidiaries.’

Arden. Kitchin, Jackson LJJ
[2016] EWCA Civ 468
Bailii
England and Wales

Corporation Tax

Updated: 10 November 2021; Ref: scu.564449

Standfast Corporate Underwriters Ltd v Revenue and Customs: FTTTx 12 Feb 2014

FTTTx Corporation tax – corporate underwriter at Lloyd’s – application of anti-loss buying restriction in s227A Finance Act 1994 – taxpayer owned by consortium during period of ‘group-relief continuity condition’ in s227A(5), subsequently acquired as wholly-owned subsidiary of one of the consortium members – then seeking to surrender in later period, by way of group claim, underwriting losses which had been effectively deferred to that period by successive elections under s107(4) Finance Act 2000 – whether the losses sought to be surrendered (or some part of them) could be regarded as ‘losses of the last active underwriting year’ – held yes, some part of them – whether existence of consortium relief relationship between companies during the relevant period satisfied the ‘group-relief continuity condition’ in s227A(5), in spite of later surrender being purportedly made pursuant to a group (and not consortium) claim – held yes – whether commencement provision, properly interpreted, applied s227A to the present facts – held no – appeal allowed

Poole TJ
[2014] UKFTT 182 (TC)
Bailii
Finance Act 1994 227A
England and Wales

Corporation Tax

Updated: 10 November 2021; Ref: scu.521804

Six Continents Ltd and Another v Inland Revenue and Another: ChD 5 Oct 2016

Recovery of wrongly charged tax

The second claimant claimed restitution from the defendants in respect of United Kingdom corporation tax unlawfully charged on certain dividends paid to it by a wholly-owned subsidiary incorporated and resident in the Netherlands.

Henderson J
[2016] EWHC 2426 (Ch)
Bailii
England and Wales

Corporation Tax

Updated: 02 November 2021; Ref: scu.569929

Autologic Holdings Plc and others v Commissioners of Inland Revenue: HL 28 Jul 2005

Taxpayer companies challenged the way that the revenue restricted claims for group Corporation Tax relief for subsidiary companies in Europe. The issue was awaiting a decision of the European Court. The Revenue said that the claims now being made by other companies should proceed through the Commissioners who could implement European law directly. The taxpayers challenged their jurisdiction to hear certain claims.
Held: Where the Commissioners had jurisdiction, the taxpayers had an obligation to take their claims to the Commissioners.
Where the time limit for use of the statutory scheme had not expired, a taxpayer’s only way of challenging a taxing provision as contrary to European law was by making use of the statutory tribunal scheme, as opposed to judicial review.
Lord Nicholls of Birkenhead said: ‘Underlying this conclusion is a point of general policy concerning cases where an applicant claims he has been wrongly deprived of benefits to which he is entitled under directly applicable provisions of Community law. Where Parliament has assigned to a specialist tribunal responsibility for adjudicating on disputes over the payment of such benefits, and an application to that tribunal is not time-barred, in the ordinary course the primary remedy for non-receipt of such benefits is to have recourse to that tribunal. That tribunal will give effect to the applicant’s rights under directly enforceable provisions of Community law as well as his rights under domestic law. The tribunal will afford him the benefits to which he is properly entitled. In such cases, where that course is still available to an applicant, claims in the High Court founded on an alleged breach of Community law will not normally be appropriate.’
Lord Millett said that ‘the computation of a taxpayer’s taxable profits for the purpose of determining his liability to tax is within the exclusive jurisdiction of the commissioners’
Lord Walker of Gestingthorpe referred to: ‘the general principle embodied in tax law before self-assessment, that any dispute with the revenue about an individual’s liability to income tax or a company’s liability to corporation tax is to be determined in the first instance by the general commissioners or the special commissioners.’

Lord Nicholls of Birkenhead, Lord Steyn, Lord Hope of Craighead, Lord Walker of Gestingthorpe
[2005] UKHL 54, Times 01-Aug-2005, [2005] 3 CMLR 2, [2005] STC 1357, [2005] STI 1336, [2006] 1 AC 118, [2005] 3 WLR 339, [2005] 4 All ER 1141, [2005] BTC 402, [2006] Eu LR 131, 77 TC 504
Bailii, House of Lords
England and Wales
Citing:
Cited – Imperial Chemical Industries v Colmer ECJ 16-Jul-1998
A member state was not allowed to impose a tax regime which discriminated against the subsidiaries of a company based in that state where they were based in other member states, but discrimination was allowed where the subsidiaries were based . .
Cited – Metallgesellschaft Ltd and Others v Inland Revenue Commissioners and Another Hoechst Ag and Another v Same ECJ 8-Mar-2001
The British law which meant that non-resident parent companies of British based businesses were not able to recover interest on payments of advance corporation tax, was discriminatory against other European based companies. Accordingly the law was . .
Appeal from – Loss Relief Group, Test Claimants In v Inland Revenue CA 28-May-2004
The taxpayers sought determination by the court of their various claims for group tax relief. The High Court had declined jurisdiction.
Held: The appeal was allowed. The judge’s attitude was one which would perhaps appeal to most lawyers . .
At first instance – NEC Semi-Conductors Limited and Other Test Claimants v The Commissioners of Inland Revenue ChD 24-Nov-2003
UK companies were subsidiaries of companies resident abroad, and complained that they were unable to make group income elections.
Held: The prohibition infringed non-discrimination provisions of double taxation agreements – non-discrimination . .
At First Instance – Claimants under the Loss Relief Group Litigation Order v Inland Revenue Commissioners ChD 3-Mar-2004
Various claimants sought to have issues of law on group relief and other issues settled under a group litigation order.
Held: The High Court had no jurisdiction to hear such matters until they had first been raised in ordinary tax appeals . .
Cited – In re Vandervell’s Trusts (No 1); Vandervell Trustees Limited v White and Others HL 15-Jul-1970
Practice – Parties – Joinder – Proceedings between subjects raising issues material to income tax – Joinder of Commissioners of Inland Revenue – Income Tax Act 1952 (15 and 16 Geo. 6 and 1 Eliz. 2, c.10), ss. 52 and 64 ; Income Tax Management Act . .
Mentioned – Barraclough v Brown HL 1897
The 1889 Act gave statutory undertakers who had incurred expenditure in removing a sunken vessel a right ‘to recover such expenses from the owner of such vessel in a court of summary jurisdiction.’ the undertakers began their action in the High . .
Approved – Glaxo Group Ltd and Others v Inland Revenue Commissioners ChD 21-Nov-1995
A tax adjustment can be made by the Inland Revenue on an open assessment following transfer pricing enquiry and direction, even after many years. The court considered that the jurisdiction of the special and the general commissioners to determine . .
At Special Comissioners – Marks and Spencer Plc v Halsey (Inspector of Taxes) 2003
Marks and Spencer Plc appealed against the refusal of group relief, on the ground that the statutory limitations on the territorial scope of group relief were incompatible with, and overridden by, Community law. The Special Commissioners dismissed . .
Cited – Regina v Secretary of State for Transport, Ex parte Factortame Ltd HL 18-May-1989
The applicants were companies owned largely by Spanish nationals operating fishing vessels within UK waters. The 1988 Act required them to re-register the vessels as British fishing vessels. The sought suspension of enforcement pending a reference . .
Cited – Amministrazione Delle Finanze Dello Stato v Simmenthal SpA (No 2) ECJ 9-Mar-1978
ECJ The Court of Justice considered a reference for a preliminary ruling, pursuant to article 1977 of the Treaty, as having been validly brought before it so long as the reference has not been withdrawn by the . .
Cited – Imperial Chemical Industries Plc v Colmer (Inspector of Taxes) (No 2) HL 18-Nov-1999
Where a group of companies sought consortium group relief, but the majority of the companies within the group were based outside the European Union, the court need not apply European Union standards to the test, but could instead apply the standards . .
Cited – D v Inspecteur van de Belastingdienst /Particulieren /Ondernemingen buitenland te Heerlen (Free Movement Of Capital) ECJ 5-Jul-2005
ECJ Tax legislation – Wealth tax – Entitlement to an allowance – Separate treatment of residents and non-residents – Double taxation convention. . .
Cited – Dorsch Consult Ingenieursgesellschaft v Bundesbaugesellschaft Berlin mbH ECJ 17-Sep-1997
ECJ Preliminary rulings – Reference to the Court – National court or tribunal within the meaning of Article 177 of the Treaty – Definition – Body competent to hear appeals concerning the award of public . .
Cited – Steenhorst-Neerings v Bestuur van de Bedrijfsvereniging voor Detailhandel, Ambachten en Huisvrouwen ECJ 27-Oct-1993
Europa Community law does not preclude the application of a national rule of law according to which benefits for incapacity for work are payable no more than one year before the date of claim, in the case where . .
Cited – Brasserie du Pecheur v Bundesrepublik Deutschland; Regina v Secretary of State for Transport, ex parte Factortame and others (4) ECJ 5-Mar-1996
Member states may be liable to individuals for their failure to implement EU laws. The right of individuals to rely on directly applicable provisions of the EC Treaty before national courts is not sufficient in itself to ensure full and complete . .
Cited – Elsie Rita Johnson v Chief Adjudication Officer ECJ 6-Dec-1994
Europa Social policy – Equal treatment for men and women in matters of social security – Directive 79/7 – Article 4(1) – Direct effect – National legislation limiting the period prior to the bringing of a claim . .
Cited – Inland Revenue and Another v Deutsche Morgan Grenfell Group Plc CA 4-Feb-2005
The company sought repayment of excess advance corporation tax payments made under a mistake of law. The question was the extent of the effect of the ruling in Klienwort Benson, in particular whether it covered sums paid as taxation, and how the law . .
Cited – Amon v Raphael Tuck and Sons Ltd 1956
The court analysed the circumstances under which additional parties might be joined to an action by a defendant, applying a narrow interpretation. The court considered whether a defendant may be added against the parties’ wishes: ‘There are two . .
Cited – Pickstone v Freemans Plc HL 30-Jun-1988
The claimant sought equal pay with other, male, warehouse operatives who were doing work of equal value but for more money. The Court of Appeal had held that since other men were also employed on the same terms both as to pay and work, her claim . .
Cited – Argosam Finance Co Ltd v Oxby (Inspector of Taxes) CA 1965
A company which dealt in shares issued an originating summons in the Chancery Division requesting a declaration as to the correct method of computing its income for the purposes of loss relief. The revenue challenged the proceedings as an abuse of . .
Cited – In re Vandervell’s Trusts; Vandervell Trustees Limited v White and Others CA 1970
The deceased had sought to create a trust to benefit the Royal College of Surgeons. The parties disputed its tax effect.
Held: Lord Denning MR said: ‘We will in this court give the rule a wide interpretation so as to enable any party to be . .
Cited – Jean Reyners v Belgian State ECJ 21-Jun-1974
Europa The rule on equal treatment with nationals is one of the fundamental legal provisions of the community. As a reference to a set of legislative provisions effectively applied by the country of establishment . .
Cited – Litster and Others v Forth Dry Dock and Engineering Co Ltd HL 16-Mar-1989
The twelve applicants had been unfairly dismissed by the transferor immediately before the transfer, and for a reason connected with the transfer under section 8(1). The question was whether the liability for unfair dismissal compensation . .
Cited – Woolwich Equitable Building Society v Inland Revenue Commissioners (2) HL 20-Jul-1992
The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. . .
Cited – Rewe-Handelsgesellschaft Nord Mbh Et Rewe-Markt Steffen v Hauptzollamt Kiel ECJ 7-Jul-1981
Europa The exemption provided for by regulation no 1544/69, as last amended by regulation no 3061/78, applies only to goods contained in the personal luggage of travellers coming from a non-member country. That . .
Cited – Emmott v Minister for Social Welfare and Attorney General ECJ 25-Jul-1991
Europa So long as a directive has not been properly transposed into national law, individuals are unable to ascertain the full extent of their rights. That state of uncertainty for individuals subsists even after . .
Cited – Kobler v Republik Osterreich ECJ 30-Sep-2003
The claimant’s claim had been presented to the Supreme Administrative Court in Austria, who had referred a question to the ECJ. Following the Schoning decision, the court withdrew the referral, and dismissed the claim. He now claimed damages from . .
Cited – Marshall v Southampton and South West Hampshire Area Health Authority (No 2) ECJ 2-Aug-1993
The UK law limiting awards of damages in sex discrimination cases is unlawful, and fails to implement European directive fully. Financial compensation must be at a level adequate to achieve equality between the workers identified. . .
Cited – Roquette Freres SA v Direction des services fiscaux du Pas-de-Calais ECJ 28-Nov-2000
Europa In the absence of Community rules on reimbursement of national charges levied though not due, it is for the domestic legal system of each Member State to designate the courts and tribunals having . .
Cited – Regina v Commissioners of Inland Revenue ex parte Michael Bishopp (for and on Behalf of Partners In Price Waterhouse (a Firm)) Admn 18-Dec-1997
. .
Cited – Peterbroeck, Van Campenhout and Cie v Belgian State ECJ 14-Dec-1995
It is a basic principle of European Union law that national law should provide effective legal protection, by establishing a system of legal remedies and procedures which ensure respect for the relevant European law right: ‘For the purposes of . .
Cited – Criminal proceedings against Sanz de Lera and others ECJ 14-Dec-1995
Europa Articles 73b(1) and 73d(1)(b) of the Treaty, which prohibit restrictions on movements of capital between Member States and between Member States and non-member countries, on the one hand, and authorizing . .

Cited by:
Cited – Sharp v Caledonia Group Services Ltd EAT 1-Nov-2005
EAT Equal Pay Act – Material factor defence – In an equal pay claim involving a presumption of direct discrimination the genuine material factor defence requires justification by objective criteria.
The . .
Cited – Total Network Sl v Revenue and Customs HL 12-Mar-2008
The House was asked whether an action for unlawful means conspiracy was available against a participant in a missing trader intra-community, or carousel, fraud. The company appealed a finding of liability saying that the VAT Act and Regulations . .
Cited – Blackburn and Another v West Midlands Police CA 6-Nov-2008
The claimants, female police officers, complained that male officers had received priority payments where they had received none. The defendant said that the payments were justified in achieving a proper aim, namely the encouragement of night . .
Cited – The Bodo Community and Others v The Shell Petroleum Development Company of Nigeria Ltd TCC 20-Jun-2014
15,000 or more claimants and claims on behalf of children, sought damages at common law and statutory compensation under the law of Nigeria in relation to oil spills from pipelines said to have been caused by Shell Petroleum Development Company of . .
Cited – Cotter v Revenue and Customs SC 6-Nov-2013
This appeal asked as to the boundary between the jurisdiction of the First-tier Tribunal (Tax Chamber) and that of the county court or the High Court, and the legality of the approach which the Revenue took to entries which Mr Cotter, had made in a . .
Cited – HM Revenue and Customs v Cotter CA 8-Feb-2012
Mr Cotter’s accountants had submitted a second tax return adding claims to loss relief in the following year. The claims were contentious, but he invited a review by the Revenue asserting that the losses wiped out any liability to tax. The Revenue . .
Cited – Revenue and Customs v Cotter ChD 14-Apr-2011
The taxpayer’s accountants had submitted a tax return amending the taxpayer’s own return adding claims for losses. The accountant acknowledged the contentious nature of the claim and invited a review. The Revenue sought now to recover the tax due . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax, Taxes Management

Leading Case

Updated: 02 November 2021; Ref: scu.229067

Shop Direct Group, Littlewoods Retail Ltd and Others v HMRC: UTTC 19 Apr 2013

UTTC Corporation Tax: Effect of receipt by trader or successor to trade of sums in respect of VAT repaid under s80 VATA to representative member of VAT group plus interest paid under s78 VATA. Question of beneficial ownership of sums received and whether ‘arising from the trade’. Application of sections 103 and 106 ICTA 1988. Whether interest payments could be characterised as arising under a ‘loan relationship’ and amounted to a ‘money debt’ for purposes of section 100 FA 1996

Asplin J
[2013] UKUT 189 (TCC)
Bailii
Income and Corporation Taxes Act 1988 103 106
England and Wales
Citing:
Appeal from – Shop Direct Group and Others v Revenue and Customs FTTTx 14-Feb-2012
FTTTx Corporation tax – receipts of payments in respect of overpaid VAT and statutory interest – whether VAT repayments trading receipts – whether payments in respect of supplies made in discontinued trades . .

Cited by:
Appeal from – Shop Direct Group and Others v HM Revenue and Customs ChD 19-Apr-2013
. .
At UTTC – Shop Direct Group v Revenue and Customs CA 11-Mar-2014
The company sought to challenge the assessment to corporation tax of a very large repayment of VAT, together with an even larger amount of interest.
Held: The appeal failed. . .
At UTTC – Shop Direct Group v Revenue and Customs SC 17-Feb-2016
The Court considered the interpretation of the sections which applied corporation tax to post-cessation receipts. Companies had received from the Inland Revenue substantial repayments of VAT together with interest. There had been reorganisations of . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 02 November 2021; Ref: scu.509187

J D Wetherspoon Plc v Revenue and Customs: FTTTx 18 Dec 2009

FTTTx Corporation tax – capital allowances – machinery or plant – conversion, fitting out and refurbishment of public houses – whether items of cost qualify for allowances under section 24 CAA 1990 or section 66 CAA 1990 (or both) – consideration of what amounts to alterations to an existing building incidental to the installation of machinery or plant – decision in principle on sample expenditure – Appellant successful in part.

[2009] UKFTT 374 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 02 November 2021; Ref: scu.409152

Holland v Revenue and Customs and Another: CA 2 Jul 2009

The appellant supported IT workers. Through his own company, he set up companies in which his company was a director, and which companies in turn employed the IT workers securing substantial savings in higher rate Corporation Tax.
Held: The defendant’s appeal succeeded. Though the appellant was not himself a director in the companies, his company was and it in turn held the directorships, and such a person might according to the circumstances be personally liable for misfeasance as a de facto director of them under section 744. In this case he was not.

Ward, Rimer, Elias LJJ
[2009] EWCA Civ 625, [2009] STC 1639, [2009] STI 2026, Times 28-Jul-2009, [2009] 2 BCLC 309
Bailii
Insolvency Act 1986 212, Companies Act 1985 727 744
England and Wales
Citing:
Appeal from – HM Revenue and Customs v Holland and Another ChD 24-Jun-2008
The Revenue sought to recover from the defendant substantial sums in respect of allegedly unlawful dividends paid from an insolvent company. They said that the defendant and his wife were de facto directors.
Held: Claims agains the second . .
Cited – Salomon v A Salomon and Company Ltd HL 16-Nov-1896
A Company and its Directors are not same paersons
Mr Salomon had incorporated his long standing personal business of shoe manufacture into a limited company. He held nearly all the shares, and had received debentures on the transfer into the company of his former business. The business failed, and . .
Cited – In re Hydrodam (Corby) Limited ChD 1994
ET plc wholly owned MCP Ltd which wholly owned Landsaver MCP Limited, which wholly owned Hydrodam (Corby) Limited (‘HCL’). The only de jure directors of HCL were two Channel Island companies. HCL went into compulsory liquidation and its liquidator . .
Cited – In re Bulawayo 1907
The court asked as to the possibility of appointing a company as a director of another company in the absence of an express power in the articles. . .
Cited – Secretary of State for Trade and Industry v Hall and Nuttall ChD 28-Jul-2006
The Secretary sought disqualification of the defendants. The second defendant had not been a director of the company, but director of another company which in turn held a directorship in the defaulting company.
Held: The claim failed: ‘i) As I . .
Cited – Re Kaytech International plc; Secretary of State for Trade and Industry v Kaczer and others CA 1999
Robert Walker LJ said that the expression ‘de facto director’ had been in use for a long time, and commented on the failure to distinguish in pleadings between pleas that someone was a shadow or a de facto director. The two different labels were not . .

Cited by:
Appeal from – Holland v Revenue and Customs and Another SC 24-Nov-2010
The Revenue sought an order under section 212 of the 1986 Act, for payment of the tax debts of the insolvent company by a de facto director. H had organised a scheme under which IT contractors had worked through companies created by him under a . .

Lists of cited by and citing cases may be incomplete.

Company, Corporation Tax

Updated: 02 November 2021; Ref: scu.347298

Explainaway Ltd and Others v Revenue and Customs: FTTTx 24 Jun 2011

Corporation tax – scheme to avoid corporation tax on chargeable gains – whether derivative transactions gave rise to chargeable gains and losses – whether loss arising on disposal of shares in group company was an allowable loss – ICTA, s 128 and TCGA, s 2 and s 143 – application of Ramsay principle – whether interest costs for scheme borrowings had an unallowable purpose – FA 1996, Sch 9, para 13

[2011] UKFTT 414 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 02 November 2021; Ref: scu.443107

Boake Allen Ltd and others v Revenue and Customs: HL 23 May 2007

The revenue appealed against a decision that provisions which did not allow the defendants, as companies with foreign parents, the right to make group income elections which would have allowed them to pay on their profits to their parent companies free of advance corporation tax, were discriminatory.
Held: The discrimination was not on the basis that the capital of the subsidiary was controlled by a foreign resident company. The nature of election allowed by the statute was as to which of two companies would pay the tax. That concept had no meaning when applied to a company which would not pay such a tax. The difference was not improper discrimination.

Lord Hoffmann, Lord Woolf, Lord Walker of Gestingthorpe, Lord Mance, Lord Neuberger of Abbotsbury
[2007] UKHL 25, Times 24-May-2007, [2007] 1 WLR 1386, [2007] 3 All ER 605
Bailii
Income and Corporation Taxes Act 1988 247
England and Wales
Citing:
Appeal from – Boake Allen Ltd and others v HM Revenue and Customs CA 31-Jan-2006
The claimant companies had paid corporation tax under rules which had later been found to be discriminatory. They now sought repayment by virtue of double taxation agreements with the countries in which the parent companies were based.
Held: . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax

Leading Case

Updated: 02 November 2021; Ref: scu.252518

HBOS Treasury Services Plc v Revenue and Customs: FTTTx 12 Oct 2009

FTTTx Corporation Tax – Joint referral of four disputed issues in relation to treatment of derivatives and to capital gains treatment of the sale of a company – scheme for the avoidance of income recognition on a re-couponing of an ‘in the money’ fixed/floating swap – paras 15 and 28 of Schedule 26 to FA 2002 – capital gains value shifting – Section 30 TCGAct 1992- one issue determined in favour of the taxpayer company and three issues determined in favour of HMRC.

Nowlan TJ
[2009] UKFTT 261 (TC), [2009] STI 3105, [2010] SFTD 134
Bailii
England and Wales

Corporation Tax, Income Tax

Updated: 01 November 2021; Ref: scu.409075

Memec Plc v Commissioners of Inland Revenue: CA 9 Jun 1998

Memec plc, was a partner in a German silent partnership (stille Gesellschaft). The partnership had no separate legal personality, but was a contractual arrangement under which Plc had the right to receive a share of the profits of the business carried on by the other partner, in return for a capital payment. The other partner, Memec GmbH, was a German company, wholly owned by Plc. It alone carried on the business of the silent partnership. It alone owned the assets of the business, and the income from those assets as it accrued. It had wholly owned subsidiaries, which were also German companies. The subsidiaries paid dividends to GmbH, and that income formed the principal source of the profits of the partnership, which were shared between the partners in accordance with their agreement. The question was whether Plc could claim credit under the double taxation agreement for German taxes paid by the subsidiaries of GmbH on their trading profits.
Held: Double taxation relief was not available where money earned by German Company on German trading was transferred to English company in silent partnership, since it was not a payment of dividends. The court emphasised the need to identify the source of the UK company’s income, and whether its partnership (governed by foreign law) with a foreign subsidiary, which received the dividends in question and then made payments to the UK company in accordance with the partnership agreement, was ‘transparent’, in the sense that the payment of the dividends to the foreign subsidiary, and its payment to the UK company of the sums due under the partnership agreement, were equivalent to the payment of the dividends directly to the UK company itself.

Peter Gibson, Henry LJJ, Sir Peter Staughton
Times 01-Jul-1998, [1998] EWCA Civ 941, [1998] STC 754, (1998) 1 ITL Rep 3, (1998) 71 TC 77, [1998] BTC 251
Bailii
Income and Corporation Taxes Act 1988 Part XVIII
England and Wales
Citing:
Appeal from – Memec Plc v Inland Revenue Commissioners ChD 7-Nov-1996
Double taxation relief was not available for a distribution by a German company to its UK partner.
An international treaty should be construed in a manner which is ‘international, not exclusively English’. . .

Cited by:
Cited – Anson v Revenue and Customs SC 1-Jul-2015
Interpretation of Double Taxation Agreements
This appeal is concerned with the interpretation and application of a double taxation agreement between the United Kingdom and the United States of America. A had been a member of an LLP in Delaware, and he was resident within the UK, but not . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax

Leading Case

Updated: 01 November 2021; Ref: scu.144420

Fidex Ltd v HM Revenue and Customs: CA 21 Apr 2016

‘This appeal is concerned with a tax avoidance scheme called Project Zephyr. The object of this scheme was to create a loss of around 84 million Euros in the hands of the appellant (‘Fidex’) which would be available for group relief throughout the BNP Paribas group of companies of which Fidex forms a part.’

Arden, Kitchin, LJJ, Sir Stephen Richards
[2016] EWCA Civ 385, [2016] STC 1920, [2016] BTC 16, [2016] 4 All ER 1063
Bailii
Finance Act 1996
England and Wales
Citing:
At FTTX – Fidex Ltd v Revenue and Customs FTTTx 2-Apr-2013
FTTTx CORPORATION TAX – loan relationships – debit under paragraph 19A, Schedule 9, Finance Act 1996 in respect of the difference in the accounting value of loan relationships on a change of accounting practice – . .
Appeal from – Fidex Limited v Revenue and Customs UTTC 13-Nov-2014
Procedure – appeal against closure notice – reliance on grounds for amendment not stated in closure notice – Tower McCashback considered Corporation tax – loan relationships – application of paragraph 13 Sch9 FA 1996 to debit arising under para19A . .

Lists of cited by and citing cases may be incomplete.

Taxes Management, Corporation Tax

Updated: 01 November 2021; Ref: scu.562450

Revenue and Customs v Leekes Ltd: UTTC 12 Jul 2016

UTTC CORPORATION TAX – acquisition of company with accrued losses by company carrying on similar trade – whether acquirer entitled to set losses against income of enlarged group – ICTA ss 337, 343, 393 – losses to be set only against income of predecessor’s trade – appeal allowed

[2016] UKUT 320 (TCC), [2016] BTC 513, [2016] STC 1970, [2016] STI 2204
Bailii
England and Wales

Corporation Tax

Updated: 01 November 2021; Ref: scu.567366

Cristel Ltd v Revenue and Customs: FTTTx 21 Jun 2012

FTTTx Corporation tax – permission to make a late appeal in relation to the tax for the accounting period ending May 2003 – whether precluded by previous HMRC amendments – whether in the interests of justice to allow a late appeal – permission refused.

Anne Redston
[2012] UKFTT 400 (TC)
Bailii
England and Wales

Corporation Tax

Updated: 01 November 2021; Ref: scu.462790

Felixstowe Dock and Railway Company Ltd v The Commissioners For Her Majesty’s Revenue And Customs: ECJ 24 Oct 2013

ECJ Opinion – Interpretation of Articles 43 EC and 48 EC – Freedom of establishment – Tax legislation – Corporation tax – Tax relief – Consortium claim for group relief (consortium relief) – National legislation excluding the transfer of losses within the national territory by one consortium company to another company belonging to a company group to which a ‘link company’ that is also a member of the consortium belongs – Residence requirement imposed on the link company – Discrimination according to the place of the corporate seat – Ultimate parent in third country – Corporate ties passing through third countries

Jaaskinen AG
C-80/12, [2013] EUECJ C-80/12
Bailii
European
Citing:
Reference – The Felixstowe Dock and Railway Company Ltd and Others v Revenue and Customs FTTTx 19-Dec-2011
Corporation tax – joint referral – FA 1998, Sch 18, para 31A – group relief – consortium – surrendering company indirectly partly owned by Luxembourg company – condition that ‘link company’ must be UK resident or carry on a trade in the UK through a . .

Cited by:
Opinion – Felixstowe Dock And Railway Company Ltd v The Commissioners For Her Majesty’s Revenue And Customs ECJ 1-Apr-2014
Judgment – Reference for a preliminary ruling – Freedom of establishment – Corporation tax – Tax relief – Groups of companies and consortia – National legislation permitting losses to be transferred between a company belonging to a consortium and a . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 01 November 2021; Ref: scu.516981

JD Wetherspoon v HMRC: UTTC 31 Jan 2012

UTTC Corporation tax – capital allowances – machinery or plant – conversion, fitting out and refurbishment of public houses – whether items of cost qualify for allowances under section 24 CAA 1990 or section 66 CAA 1990 (or both) – consideration of what amounts to alterations to an existing building incidental to the installation of machinery or plant – decision in principle on sample expenditure.

ColinBishopp Judge
[2012] UKUT 42 (TCC)
Bailii
England and Wales

Corporation Tax

Updated: 01 November 2021; Ref: scu.452886

Zoki UK Ltd v Revenue and Customs: FTTTx 14 Feb 2014

FTTTx Paye and CT – late lodging of employer’s annual return and ct return- bookkeeper off sick – lack of funds due to downturn in business due to recession – lack of action by appellants – whether reasonable excuse – no – appeal dismissed

Baird J
[2014] UKFTT 189 (TC)
Bailii
England and Wales

Income Tax, Corporation Tax

Updated: 01 November 2021; Ref: scu.521813

The Prudential Assurance Company Ltd v HM Revenue and Customs: CA 19 Apr 2016

The issues on this appeal all relate to what have been called ‘portfolio holdings’; that is to say dividends paid on shares in foreign companies held as investments, where the investor holds less than 10 per cent of the voting power in the company in question.
‘Our procedural system is and remains an adversarial one. It is for the parties (subject to the control of the court) to define the issues on which the court is invited to adjudicate. This function is the purpose of statements of case. The setting out of a party’s case in a statement of case enables the other party to know what points are in issue, what documents to disclose, what evidence to call and how to prepare for trial. It is inimical to a fair hearing that a party should be exposed to issues and arguments of which he has had no fair warning. If a party wishes to raise a new point, he should do so by amending a statement of case. We were told that by the time that skeleton arguments for trial were served each party would know what points were in issue. We do not regard that as sufficient. In this case, for example, HMRC’s skeleton argument was served about ten days before the trial started. If (as in fact happened in this case) HMRC wished to argue that the evidence proposed to be called by Prudential was directed at the wrong issue (being an issue that had not been raised before) ten days’ prior notice was manifestly inadequate.
Although in days gone by the court would routinely allow late amendments to statements of case, in more recent time attitudes have changed. It is now the case that the court requires strong justification for a late amendment. This is not only in the interest of the opposing party but also consonant with the interests of other litigants in other cases before the court and the court’s duty to allocate a proportionate share of the court’s resources to any particular case. Where a new issue arises which is not foreshadowed in a statement of case, a party needs the court’s permission to advance it. The court is then faced with a discretionary case management decision, to be exercised in accordance with the overriding objective.’

Lewison, Christopher Clarke, Sales LJJ
[2016] EWCA Civ 376, [2016] BTC 15, [2016] STI 1430, [2016] STC 1798, [2017] 1 All ER 815
Bailii
England and Wales
Cited by:
At CA – Prudential Assurance Company Ltd v Revenue and Customs SC 25-Jul-2018
PAC sought to recover excess advance corporation tax paid under a UK system contrary to EU law. It was now agreed that some was repayable but now the quantum. Five issues separated the parties.
Issue I: does EU law require the tax credit to be . .
Cited – Scott v Bridge and Others ChD 25-Nov-2020
Claim to recover money and property said to have been transferred by the claimant to the defendants or one or more of them. The money concerned came from a bank account belonging to the claimant. The property concerned consisted of two . .

Lists of cited by and citing cases may be incomplete.

Corporation Tax, Litigation Practice

Updated: 01 November 2021; Ref: scu.562160

Argenta Spaarbank Nv v Belgische Staat: ECJ 4 Jul 2013

argentasnv_belgECJ0713

ECJ Tax legislation – Corporation tax – Deduction for risk capital – Notional interest – Reduction of the amount deductible by companies with establishments abroad the income from which is exempt under double taxation conventions

C-350/11, [2013] EUECJ C-350/11
Bailii

European, Corporation Tax

Updated: 01 November 2021; Ref: scu.512168

Holland v Revenue and Customs and Another: SC 24 Nov 2010

The Revenue sought an order under section 212 of the 1986 Act, for payment of the tax debts of the insolvent company by a de facto director. H had organised a scheme under which IT contractors had worked through companies created by him under a composite company scheme, and in each of which he retained one share. When the companies became insolvent, HMRC said that the companies had paid dividends without the supporting assets, and that H was a de facto director having retained a single share in each company through his own company. No allegation was made that this structure was a sham and there was never any pleading of dishonesty. HMRC now appealed a finding that he was not so liable.
Held: The appeal failed (Lords Walker and Clarke dissenting). The mere fact of acting as a director of a corporate director will not be enough for an individual to become a de facto director of the subject company. Acts entirely within the ambit of the duties and responsibilities of a director of the corporate director, are to be attributed to that capacity. The court must respect the separate identities in law of the various companies. The court must look to the actual actions of the person to see whether they amounted to an assumption of the responsibilities of a director.
Lord Walker said that a person which takes all the important decisions of a company’s management, and ensures that they are given effect to acts as a director. He would have allowed the appeal.

Lord Hope, Deputy President, Lord Walker, Lord Collins, Lord Clarke, Lord Saville
[2010] UKSC 51, UKSC 2009/0131, [2010] STI 3074, [2010] 1 WLR 2793, [2011] BCC 1, [2011] 1 All ER 430, [2011] Bus LR 111
Bailii, SC Summary, SC, Bailii Summary
Insolvency Act 1986 212
England and Wales
Citing:
At First Instance – HM Revenue and Customs v Holland and Another ChD 24-Jun-2008
The Revenue sought to recover from the defendant substantial sums in respect of allegedly unlawful dividends paid from an insolvent company. They said that the defendant and his wife were de facto directors.
Held: Claims agains the second . .
Appeal from – Holland v Revenue and Customs and Another CA 2-Jul-2009
The appellant supported IT workers. Through his own company, he set up companies in which his company was a director, and which companies in turn employed the IT workers securing substantial savings in higher rate Corporation Tax.
Held: The . .
Cited – Salomon v A Salomon and Company Ltd HL 16-Nov-1896
A Company and its Directors are not same paersons
Mr Salomon had incorporated his long standing personal business of shoe manufacture into a limited company. He held nearly all the shares, and had received debentures on the transfer into the company of his former business. The business failed, and . .
Cited – In re Lo-Line Electric Motors Ltd 1988
When considering the filing of additional evidence changing allegations made under the 1986 Act, the paramount requirement is that the director facing disqualification must know the charge he has to meet. As to the standard of misbehaviour required . .
Cited – Re Kaytech International plc; Secretary of State for Trade and Industry v Kaczer and others CA 1999
Robert Walker LJ said that the expression ‘de facto director’ had been in use for a long time, and commented on the failure to distinguish in pleadings between pleas that someone was a shadow or a de facto director. The two different labels were not . .
Cited – Re Canadian Land Reclaiming and Colonizing Co CA 1880
The court was asked whether two individuals who had been appointed and acted as directors while they were ineligible were directors or other officers liable to a summons for misfeasance.
Held: The test was was whether a man who had assumed a . .
Cited – In re Hydrodam (Corby) Limited ChD 1994
ET plc wholly owned MCP Ltd which wholly owned Landsaver MCP Limited, which wholly owned Hydrodam (Corby) Limited (‘HCL’). The only de jure directors of HCL were two Channel Island companies. HCL went into compulsory liquidation and its liquidator . .
Cited – Re County Marine Insurance Co (Rance’s Case) 1870
The directors of an insurance company had declared a bonus by means of a an account of receipts which failed to deal properly with the risks underwritten. They then sought to have the company wound up voluntarily.
Held: The Directors could be . .
Cited – Re Exchange Banking Co, Flitcroft’s Case CA 1882
For several years, the company had paid dividends drawn against false accounts, and paid them to the directirs as shareholders. When in insolvent liquidation, the copany sued thosee directors for the return of all the dividends wrongly paid out.
Cited – Re Lands Allotment Company CA 1894
A limited company is not a trustee of its funds, but their beneficial owner. However, the fiduciary character of the duties of its directors mean that they are treated as if they were trustees of those funds of the company which are in their hands . .
Cited – In re Kingston Cotton Mill (No 2) ChD 1895
The power to order a director to repay a company’s funds lost as a result of ‘misfeasance’ does not apply to conduct engaged in honestly and reasonably.
Vaughan Williams J disused the general principle the directors will be liable to restore . .
Cited – Secretary of State for Trade and Industry v Hall and Nuttall ChD 28-Jul-2006
The Secretary sought disqualification of the defendants. The second defendant had not been a director of the company, but director of another company which in turn held a directorship in the defaulting company.
Held: The claim failed: ‘i) As I . .
Cited – Re Loquitur Ltd ChD 2003
. .
Cited – Belmont Finance Corporation Ltd v Williams Furniture Ltd (No 2) 1980
It had been alleged that there had been a conspiracy involving the company giving unlawful financial assistance for the purchase of its own shares.
Held: Dishonesty is not a necessary ingredient of liability in an allegation of a ‘knowing . .
Cited – Dovey and The Metropolitan Bank (of England and Wales), Limited v Cory HL 1901
In fulfilling this personal fiduciary responsibility, a director is entitled to rely upon the judgment, information and advice of a fellow director whose integrity skill and competence he has no reason to suspect.
Earl of Halsbury LC said ‘The . .
Cited – Selangor United Rubber Estates Ltd v Cradock (No 3) ChD 1968
The expressions ‘constructive trust’ and ‘constructive trustee’ are ‘nothing more than a formula for equitable relief. It is the actual control of assets belonging beneficially to a company which causes the law to treat directors as analogous to . .

Lists of cited by and citing cases may be incomplete.

Company, Corporation Tax

Leading Case

Updated: 01 November 2021; Ref: scu.426472

Swain and Others v Revenue and Customs: FTTTx 5 Aug 2014

FTTTx Income Tax – Corporation Tax on capital gains – Whether a claim to add 60,000 pounds as enhancement expenditure to the deductible costs of some let real properties was valid, so occasioning a loss rather than a gain on a part disposal of the properties – Whether there was private use of two company cars available to and utilised by one or both of the directors of the company – whether the capital gains return was fraudulent, and the absence of any disclosures in relation to the asserted car benefits were at the very least negligent – whether penalties were justified and whether they should be adjusted – Appeals substantially disallowed, but allowed in respect of one car

[2014] UKFTT 778 (TC)
Bailii
England and Wales

Income Tax, Corporation Tax

Updated: 31 October 2021; Ref: scu.535984