Prudential Assurance Company Ltd v CRC, Supreme Court, 25 July 2018
Prudential Assurance Company was a test claimant in litigation concerning the tax treatment of UK-resident companies that received dividends from shareholdings in overseas companies between 1990 and 2009.
The Supreme Court confirmed the position in EU law that the tax credit was set by reference to the foreign nominal tax rate. It allowed HMRC’s appeals against compound interest and a restitution claim and allowed the taxpayer’s cross-appeals on the order of set-off for advance corporation tax and franked investment income.
On interest the Supreme Court said since the House of Lords ruled in Sempra Metals Ltd v CIR [2007] STC 1559 that compound interest should be paid on unlawfully levied advance corporation tax developments indicated that the decision had not had regard to tax legislation created problems in the law of limitation and caused disruption in public finances. The court said there was no right to...
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