Company was not resident in the US for treaty purposes

The taxpayer (GEFI) a UK-resident member of the GE group filed company tax returns in which it claimed a credit for US federal income tax paid on interest to which it was beneficially entitled as a limited partner in a Delaware limited partnership. The credit was against UK corporation tax paid on that income. HMRC refused the claim.

The First-tier Tribunal dismissed GEFI’s appeal finding it was neither resident in the US nor was it carrying on a business in the US. The Upper Tribunal concluded that GEFI was resident in the US for the purposes of the double tax treaty but agreed it was not carrying on a business. Both parties appealed.

The Court of Appeal preferred HMRC’s interpretation on residence based on the ordinary meaning of the words used in their context and in the light of the object and purpose of the...