Hargreaves Property Holdings Ltd v HMRC

In Hargreaves Property Holdings Ltd v HMRC [2024] EWCA Civ 365 (15 April 2024) the Court of Appeal (CA) dismissed the borrower’s appeal upholding the decisions of the First-tier Tribunal (FTT) and the Upper Tribunal (UT) that the interest on recurring loans was yearly interest (even if the duration of individual loans was less than a year) and the UK tax resident company which was the recipient of the interest was not beneficially entitled to the interest so that the UK to UK withholding tax exemption did not apply. Consequently UK income tax should have been deducted from the interest payments.

The borrower a UK resident taxpayer and the parent of a group engaged in UK property investment financed its activities with loans from multiple lenders. In 2004 the loan terms were changed with the aim of the interest not being taxable...

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