Mixed success on historic advance corporation tax matters

The test claimant companies belonged to groups that had UK-resident parents and foreign subsidiary companies in the EU and elsewhere. The case related to the tax treatment of dividends received by UK-resident companies from non-resident subsidiaries as compared with those paid and received within wholly UK-resident groups of companies.

The proceedings have been complex and extended. There have been two trials in the High Court each of which resulted in an appeal to the Court of Appeal. There were also appeals to the Supreme Court of which this is the third and three references to the Court of Justice of the European Union.

In this hearing the first issue (of seven) was whether HMRC was barred from denying the claimants’ entitlement to compound interest. The court rejected the claimants’ arguments saying HMRC’s challenge was not an abuse of process.

The court next considered the...