- 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)?
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.
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