In Bayfine UK, the Court of Appeal held that a UK resident company could not claim double tax relief or unilateral relief in the UK for US tax paid by its US parent on the same profits under the US ‘check the box’ regulations. The decision concerns the interpretation of the old US/UK Double Tax Convention, but it is of interest since the court did not focus on whether the UK or US had a primary taxing right but instead took a purposive approach to interpreting the double tax treaty. The CA also decided that HMRC were not bound to grant unilateral relief in respect of tax that had already failed to qualify for double tax relief under the treaty.
