Interpretation rejected

Preparation of accounts in accordance with UK generally accepted accounting practice (GAAP)

Ball a US publicly listed company owned indirectly BUKH a UK investment holding company. BUKH made and received loans to and from its subsidiaries and other Ball group companies. These activities were occasionally refinanced and were undertaken in sterling.

At the end of 2006 on advice from PwC BUKH implemented a scheme to change its functional currency to dollars (anti-avoidance provisions were introduced in FA 2011 to counteract these arrangements). The aim of the scheme was to trigger the right to move from statement of standard accounting practice (SSAP) 20 to financial reporting standard (FRS) 23. This would enable BUKH to make a tax loss as a result of foreign exchange variations. HMRC said the accounts should be prepared in sterling.

The dispute concerned whether BUKH’s 2006 accounts were in accordance with UK...