Discoverability of mistakes and the Limitation Act 1980

This was the latest hearing in the long-running saga known as the Franked Investment Income (FII) Group Litigation which concerned the way advance corporation tax and corporation tax used to be charged on dividends received by UK-resident companies from non-resident subsidiaries. The test claimants said the differences between their tax treatment and that of wholly UK-resident groups of companies breached the EU treaty provisions guaranteeing freedom of establishment and free movement of capital. They sought repayment of the tax wrongly paid with interest dating back to the UK’s entry to the EU in 1973.

Restitutionary claims for the recovery of money must normally be brought within six years from the date on which the money was paid. However Limitation Act 1980 s 32(1)(c) provides that in respect of an ‘action for relief from the consequences of a mistake’ the limitation period begins to...