Group relief claim after receiver appointed

The taxpayers and Piccadilly Hotels 2 (PH2L) were each 75% subsidiaries of Kelucia Ltd. In June 2011 PH2L was placed in receivership. The taxpayers claimed group relief under CTA 2010  s 154 for losses surrendered by PH2L. This was on the basis it had ceased to be a member of the same group of companies as the taxpayers when the receiver was appointed. The Bank of Scotland which had been made a security trustee under a deed of debenture appointed the receiver.

The First-tier Tribunal agreed with HMRC that the appointment of the receivers had the effect of degrouping PH2L and the taxpayers. The Upper Tribunal upheld that decision so the dispute progressed to the Court of Appeal.

Lord Justice Henderson said there was ‘considerable attraction’ in some of the taxpayers’ arguments but HMRC’s argument that the receiver’s appointment deprived the shareholders of control of PH2L must prevail....