- Court of Appeal agrees that ‘fairly represent’ requirement allows accounting override in tax avoidance case (GDF Suez Teesside v HMRC)
- What are the practical implications of this case?
- What was the background?
- The facts
- The FTT decision
- The UT decision
- What did the Court of Appeal decide?
- The ‘fairly represent’ issue
- The accounting issue
- Case details
Tax analysis: The Court of Appeal upheld the decisions of the Upper Tribunal (UT) and First-tier Tax Tribunal (FTT) in this appeal concerning the application of the loan relationships rules to a tax avoidance scheme, finding that the words ‘fairly represent’ in section 84(1) of the Finance Act 1996 (FA 1996) permitted a company’s accounting treatment to be overridden for corporation tax purposes where a scheme had been structured to exploit accounting rules to obtain a tax benefit. The Court of Appeal concluded that the UT and FTT had been entitled to find that profits should have been brought into account under the loan relationships rules despite no amount being recognised in the taxpayer’s accounts.
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