Location of parent not relevant

FCE Bank and Ford Motor Company Ltd (FMCL) were UK-resident companies owned by the US-resident company Ford Motor Company (FMC).

FCE claimed loss relief in respect of trading losses made by FMCL. HMRC refused the claim on the ground that the owner of both busineses was US resident; FCE and FMCL otherwise satisfied the requirements for group relief.

FCE's appeal was allowed by the First-tier Tribunal; HMRC appealed.

FCE and FMCL’s argument centred on the point that group relief would have been allowed had FMC been UK resident.

They believed the effect of the non-discrimination article in the 1975 UK/US double taxation agreement was that group relief was available between two UK-resident directly-held 75% subsidiaries of a US parent company in circumstances in which it would be available if the parent company was UK resident.

Otherwise...