Time limits for double tax relief claims

The taxpayers most of which were investment funds held portfolio investments in non-UK resident companies. A portfolio holding represents less than 10% of a company’s share capital.

For various accounting periods between 1991 and 2010 they claimed repayments of tax on dividends from their holdings on the basis that double taxation relief (DTR) was available.

The dispute concerned the corporation tax treatment of dividends received before 2009 when the tax rules changed. Before the changes UK-source dividends were generally exempt but non-UK source dividends were not. In the case of portfolio holdings double tax relief was given only for any withholding tax suffered. No additional relief was available for underlying tax. It is accepted that the UK legislation breached EU law in this respect.

Broadly the taxpayers sought to rely on their statutory rights under the tax legislation as interpreted to...