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Move follows Court of Appeal judgment in First Nationwide
HMRC has issued guidance on aspects of the tax treatment of payments received by companies in the UK in respect of shares held in foreign companies.
This follows the Court of Appeal judgment in CRC v First Nationwide [2012] STC 1261.
In essence, HMRC’s view is that if a dividend payment is a distribution permitted in accordance with the law that governs the foreign company then, in the absence of any evidence calling into question the legal form of the payment, it will be treated as a dividend for the purposes of CTA 2010, s 1000(1)A.
