Legal News

Derecognition of derivatives not a loss (Union Castle v HMRC) (FTT)

Published on: 10 August 2016
Published by: LexisPSL
  • Derecognition of derivatives not a loss (Union Castle v HMRC) (FTT)
  • Original news
  • What are the practical implications of this case?
  • What was this case about?
  • What did the FTT decide?
  • The accounting issue
  • The loss issue
  • The gateway issue
  • The transfer pricing issue
  • What should tax lawyers take note of?
  • More...

Article summary

Tax analysis: The First-tier Tax Tribunal (FTT) dismissed the taxpayer’s appeal against a promoted avoidance scheme involving the issue of bonus shares carrying a right to substantially all of the returns on certain derivatives and the accounting requirement for the derivatives to be derecognised. The FTT found that Union Castle Mail Steamship Company Limited (Union Castle) had not suffered a loss and therefore no tax deduction was available for the debit in relation to the derivative contracts. or take a trial to read the full analysis.

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