- High Court decides ‘subject to tax’ in SPA gross-up clause means actual tax due (AXA v Genworth)
- What are the practical implications of this case?
- What was the background?
- What did the High Court decide?
- Interpreting the gross-up obligation for tax in hand in line with the gross-up obligation for withholding tax
- Arguments with limited or no relevance
- Case details
Tax analysis: In AXA v Genworth, the High Court decided that, in the context of a gross-up clause for tax in hand in a share purchase agreement (SPA), the phrase ‘subject to tax in the hands of the receiving party’ means that the tax must actually be due and enforceable.
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