Legal News

Denial of corporation tax deduction for ‘loan relationship’ debits on grounds of ‘unallowable purposes’ (Oxford Instruments UK 2013 Limited v HMRC)

Published on: 29 April 2019
Published by: LexisPSL
  • Denial of corporation tax deduction for ‘loan relationship’ debits on grounds of ‘unallowable purposes’ (Oxford Instruments UK 2013 Limited v HMRC)
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Tax analysis: The First-tier Tax Tribunal has concluded that UK interest deductions can be denied under the ‘unallowable purposes’ rules (the statutory successor of paragraph 13 Schedule 9 Finance Act 1996) where they were incurred on intra-group debt which formed part of a hybrid mismatch structure for funding the US subgroup of a UK multinational. This structure aimed to erode the US tax base of the subgroup without giving rise to UK interest income. or take a trial to read the full analysis.

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