Restitution claim

Tax credits for unlawful charge to charge on dividends

Six Continents Overseas Holdings (SCOH) was incorporated in England and Wales in 1991. During the period 1993 to 1997 it received dividends from its wholly-owned subsidiary (SCIH) which was incorporated and resident in the Netherlands.

The dividends formed part of Six Continents’ income profits and were chargeable to UK corporation tax under Sch D case V. Six Continents claimed the tax charge was unlawful. The Court of Justice of the European Union decision in Test Claimants in the FII Group Litigation v CRC (Case C-35/11) [2013] STC 612 had established the unlawfulness under EU law of the case V charge when applied to dividends paid to a UK holding company by a subsidiary resident in another member state.

Therefore there was no dispute in the instant case about the unlawfulness of the charge: the only live issues were of a computational...