Explainaway: the unallowable purpose test

Matthew Hodkin

The First-tier Tribunal has finally given a decision on the loan relationships unallowable purpose test, 15 years after its introduction. Matthew Hodkin discusses whether it was worth the wait.

Since it was first introduced in 1996 the finance world has waited for a decision on what at the time seemed an astonishingly widely drafted anti-avoidance provision.

Subsequently similar wording has appeared in many places in the tax code and still there has been no ruling on the ‘original’ test.

It therefore seems something of a shame that the arrival of a decision on this point has been relatively unheralded.

It is...

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:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this article in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

The First-tier Tribunal has finally given a decision on the loan relationships unallowable purpose test, 15 years after its introduction. Matthew Hodkin discusses whether it was worth the wait.

Since it was first introduced in 1996 the finance world has waited for a decision on what at the time seemed an astonishingly widely drafted anti-avoidance provision.

Subsequently similar wording has appeared in many places in the tax code and still there has been no ruling on the ‘original’ test.

It therefore seems something of a shame that the arrival of a decision on this point has been relatively unheralded.