The Upper Tribunal’s decision on the transfer pricing aspects of the BlackRock case is an overly restrictive interpretation of the law, writes Paul Sutton (LCN Legal).
On 19 July 2022 the Upper Tribunal in the UK released its judgment in HMRC v BlackRock Holdco 5 LLC [2022] UKUT 199 (TCC). This overturned the previous decision of the First-tier Tribunal (FTT) ([2020] UKFTT 443 (TC)) and found in favour of HMRC: it disallowed an interest deduction on a $4bn intercompany loan. How concerned should the transfer pricing community be?
Looked at one way the decision appears to turn on its head what we previously believed to be best practice about documenting intercompany loans and in particular the treatment of covenants from parties other than the lender and the borrower.
And yet the outcome of the case should not be a huge surprise. This was an artificial structure which...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
The Upper Tribunal’s decision on the transfer pricing aspects of the BlackRock case is an overly restrictive interpretation of the law, writes Paul Sutton (LCN Legal).
On 19 July 2022 the Upper Tribunal in the UK released its judgment in HMRC v BlackRock Holdco 5 LLC [2022] UKUT 199 (TCC). This overturned the previous decision of the First-tier Tribunal (FTT) ([2020] UKFTT 443 (TC)) and found in favour of HMRC: it disallowed an interest deduction on a $4bn intercompany loan. How concerned should the transfer pricing community be?
Looked at one way the decision appears to turn on its head what we previously believed to be best practice about documenting intercompany loans and in particular the treatment of covenants from parties other than the lender and the borrower.
And yet the outcome of the case should not be a huge surprise. This was an artificial structure which...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
