• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 2/21/2014

United Kingdom - Supreme Court addresses cross-border group losses 

February 21: The UK Supreme Court on 19 February 2014 issued its judgment concerning three remaining issues in the Marks & Spencer case—i.e., the case addressing a cross-border group relief claim, and finding that the conditions of “no possibilities test” (NPT) must be satisfied at the time the actual claim is made.

The Supreme Court upheld the decision of the Court of Appeal and determined that as matter of domestic law, there was no support for the position that only one claim could be made for the same losses and the same period. Therefore, successive or cumulative claims could be made by the taxpayer as long as they were not already time barred under the existing domestic rules. The taxpayer, thus, was entitled to advance all claims made for periods under the CTSA regime.

KPMG observation

With the Supreme Court judgment, similarly situated taxpayers need to consider the following:

  • Claims for cross border group relief must be made as early as possible in order to protect the taxpayer’s position.
  • The rules allow for “sequential” claims for the same losses and periods—it could be that the NPT is clearly satisfied at the date of the later claim (e.g., when a company has ceased trading and is considering liquidation).
  • HM Revenue & Customs may need to be approached concerning any existing cross-border claims by seeking repayment (refund) on the basis of the methodology approved by the Supreme Court.

Read a February 2014 report [PDF 57 KB] prepared by the KPMG member firm in the UK about the new Supreme Court judgment in Marks & Spencer.

Other developments

Other recent tax developments in the UK concern:

  • Repeal of stamp duty on transactions in “exchange-traded funds”
  • Indirect tax briefing from HMRC
  • Introduction of “real time” information penalties is deferred by HRMC
  • Employment allowance

Read a February 2014 report [PDF 711 KB] prepared by the KPMG member firm in the UK: Weekly Tax Briefing (21 February 2014)

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