- 'Fairly represents' and tax avoidance (GDF Suez Teesside v HMRC)
- Original news
- What are the practical implications of this case?
- What was this case about?
- What were the facts?
- The First-tier Tribunal decision
- What did the Upper Tribunal decide?
- The accounting question
- The meaning of 'fairly represent'
- What should tax lawyers take note of?
- Case details
Tax analysis: The Upper Tribunal (UT) upheld the decision of the First-tier Tribunal (FTT) in this appeal concerning a tax avoidance scheme. The UT held that the FTT had been entitled to find that profits should have been brought into account under the loan relationships rules despite amounts not being recognised in the taxpayer’s accounts. The decision hinged largely on the interpretation of the phrase ‘fairly represent’ in section 84(1) of the Finance Act 1996 (FA 1996), with the UT finding that those words 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.
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