Relief allowed

BUKP and BUK were UK-resident companies which were wholly owned by a US company BDE. BUK made a substantial profit while BUKP made a hefty loss much of which it surrendered as group relief.

BUK claimed that double taxation relief extinguished its liability to UK tax. HMRC refused the claim so the company appealed.

The Special Commissioners dismissed the company’s appeal saying that unilateral relief under TA 1988 s 790 was not available to BUK for the US tax paid by BDE and that relief was not available under the Double Taxation Relief (Taxes on Income) (the USA) Order 1980 SI 2002/2848 in respect of the same US tax paid by BDE.

The company appealed.

The High Court said that the company was entitled to unilateral relief under