Legal News

Highway robbery—Stagecoach loses loan relationships ‘derecognition’ avoidance case

Published on: 18 March 2016
Published by: LexisPSL
  • Highway robbery—Stagecoach loses loan relationships ‘derecognition’ avoidance case
  • Original news
  • Broadly, what does this case consider and why is it of interest? The case is a lead case—was the scheme it considers widely used?
  • On what basis was the case decided in favour of HMRC? Do you think the taxpayer will appeal?
  • Does the decision help extend an understanding of the degree of dependence the loan relationships regime places on the accounting?
  • What do the obiter comments in the decision tell us about the status of the old ‘fairly represents’ rule? How successfully will the new regime targeted anti-avoidance provision (TAAR) (and its reliance on the principles and policy objectives that underpin the regime) replace this rule?
  • What do the obiter comments in the decision tell us about the interaction of the loan relationships regime with the tax arbitrage provisions?
  • How (if at all) would the amendments in Finance (No 2) Act 2015, and the proposed introduction of a new BEPS-compliant anti-hybrids regime in draft Finance Bill 2016, change the analysis of the facts in this case?
  • How will you be advising your clients in the light of this case (and the new anti-hybrids rules)?

Article summary

Tax analysis: James Ross, partner at McDermott Will & Emery, considers the decision in Stagecoach Group plc & Stagecoach Holdings Limited, a decision that shows the willingness of the tax tribunals to take a robust and practical approach to statutory construction in avoidance cases. or take a trial to read the full analysis.

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