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CRC v Marks & Spencer plc, Supreme Court
The taxpayer company claimed group relief in 2002 in respect of losses incurred by subsidiaries, including ones based in Belgium and Germany.
The High Court referred the issue in 2006 to the European Court of Justice, which ruled that such a claim was dependent on the ‘no possibility’ test: there had to be no possibility that the losses would be used in the member state in which the subsidiary was established.
The case returned to the UK courts, where in 2011 the Court of Appeal agreed that the claims for the corporation tax self-assessment years had been made in time and that the ‘no possibility’ test had been satisfied.
HMRC appealed, but the Supreme Court agreed with the taxpayer that entitlement to cross-border relief had to be based on the circumstances when the claim was made.
Other issues remain outstanding; the Supreme Court will make rulings at a later date.
