This case concerns a tax avoidance scheme by which the appellant taxpayer, then called Teesside Power Limited (‘TPL’) and subsequently renamed GDF Suez Teesside Limited, sought to reduce its potential liability to United Kingdom corporation tax (‘CT’) in respect of contingent and unrealised, but nevertheless very valuable, claims which it had against certain companies in the insolvent Enron Group. When the relevant transactions were entered into, between December 2006 and March 2007, the open market value of the unrealised claims is agreed to have been approximately pounds 200 million, but in accordance with UK generally accepted accounting practice (or ‘GAAP’) the claims still had a carrying value of nil in TPL’s accounts. Accordingly, if nothing were done, TPL would in principle become liable to CT on profits equivalent to the full amount of the sums received as and when the claims were realised.
Citations:
[2018] EWCA Civ 2075
Links:
Jurisdiction:
England and Wales
Corporation Tax
Updated: 29 May 2022; Ref: scu.625413
