Global

Details

  • Service: Tax, International Corporate Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 2/15/2013

United Kingdom - Cross-border group relief litigation update 

February 15:   The High Court—in a case concerning cross-border group relief claims in which the relevant losses arise in a group company other than one that is a directly held foreign subsidiary of the UK claimant—concluded that:
  • Concerning questions of EU law arising in relation to various corporate group structures—It is not appropriate for the High Court to refer the various group structure issues to the Court of Justice of the European Union (CJEU) at this stage
  • Concerning the “no possibilities test” per the CJEU judgment in Marks & Spencer (C-446/03)—It would be reasonable for HM Revenue & Customs to insist on answers to its enquiries concerning the “no possibilities test” that are confined to representative test cases.

Loss Relief GLO v. HM Revenue and Customs, [2013] EWHC 205 (Ch), 11 February 2013

Corporate group structures

In finding it was not appropriate at this point to refer the various group structure issues to the CJEU, the High Court suggested that the parties:


  • Identify a full range of suitable test cases for resolution of the group structure issues
  • Cooperate in bringing these test cases before the First Tier Tribunal “for consideration of when and in what terms a reference should be made, and of the extent to which potentially relevant facts should first be found at a hearing.”

“No possibilities test”

The High Court explained that the claimants had the burden of proving that the “no possibilities test” was satisfied, but that it would be unreasonable for HMRC to insist on full disclosure from every claimant at this stage—particularly when the “no possibilities test” is soon to be reviewed by the UK Supreme Court in the Marks & Spencer case.


The High Court found that it would not, however, be unreasonable for HMRC to insist that enquiries confined to representative test cases are answered.


Read a February 2013 report [PDF 168 KB] prepared by the KPMG member firm in the United Kingdom: Weekly Tax Matters (15 February 2013)


Also covered in the KPMG report are the following items:


  • OECD report: Addressing base erosion and profit shifting
  • Tax and procurement
  • Anson (Swift) case – Court of Appeal decision
  • Julian Martin case – First Tier Tribunal decision
  • HMRC guidance on distributions – update
  • Enactment of ESC C10
  • Building society regulations
  • VAT: CJEU – Important dates for financial services sector
  • VAT: First Tier Tribunal Decision – UKFTT72 British Film Institute



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