Unallowable purpose and corporate groups

Key points

• In its third decision this year on unallowable purpose the Court of Appeal in JTI Acquisition Company (2011) Limited v CRC [2024] EWCA Civ 652 has reaffirmed the approach laid down in BlackRock HoldCo 5 LLC v CRC [2024] EWCA Civ 330 and Kwik-Fit Group Ltd and others v CRC [2024] EWCA Civ 434 in relation to corporate groups.
• The correct approach is to identify the subjective purpose of the company that is the party to the relevant loan relationship. The purposes of other members of the group or advisers cannot automatically be attributed to the relevant company.
• However the tribunal should not adopt a ‘tunnel-visioned’ approach and the question must be determined by reference to all of the relevant facts and circumstances in particular where there is a wider scheme that has been devised at group level.
• Where a company seeks to play its...