Paul Miller reviews the recent Greene King cases, which show just how important it is, for tax purposes, to get the legal and accounting analysis right in the financial products arena.
Back in 2000 the Greene King group won a case (Greene King No 1 Ltd v Adie (Insp. of Taxes) [2005] STC (SCD) 398) in relation to an intra-group novation of a debtor's payment obligations under the loan relationships rules. The taxpayer (the transferor debtor) succeeded in claiming that the novation triggered a loan relationships loss. At first glance that was not surprising; the transferor suffered a genuine economic loss because it had to pay the transferee to take over its obligations. However HMRC argued that the ‘step-in-shoes’ rules on intra-group transfers prevented the taxpayer's claim for that loss. In...
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:
Paul Miller reviews the recent Greene King cases, which show just how important it is, for tax purposes, to get the legal and accounting analysis right in the financial products arena.
Back in 2000 the Greene King group won a case (Greene King No 1 Ltd v Adie (Insp. of Taxes) [2005] STC (SCD) 398) in relation to an intra-group novation of a debtor's payment obligations under the loan relationships rules. The taxpayer (the transferor debtor) succeeded in claiming that the novation triggered a loan relationships loss. At first glance that was not surprising; the transferor suffered a genuine economic loss because it had to pay the transferee to take over its obligations. However HMRC argued that the ‘step-in-shoes’ rules on intra-group transfers prevented the taxpayer's claim for that loss. In...
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: