Loan relationship scheme failed
In GDF Suez Teesside v HMRC [2017] UKUT 68 (17 February 2017) the UT found that the accounting of the assignment of debt claims by Teesside to a wholly owned subsidiary Teesside Recoveries and Investments was GAAP compliant; but that FA 1996 s 84(1) required Teesside to bring into account for tax purposes a sum representing the value of the shares allotted to it in exchange for the assignment.
Teesside had transferred substantial debt claims (totalling over $1bn) that it held against the Enron group to a wholly owned subsidiary Teesside Recoveries which was incorporated and tax resident in Jersey. In its notification of the scheme under DOTAS Teesside had explained that the scheme worked by enabling a UK company to indirectly realise the value of an existing asset which has no carrying value under UK GAAP ‘without...
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:
Loan relationship scheme failed
In GDF Suez Teesside v HMRC [2017] UKUT 68 (17 February 2017) the UT found that the accounting of the assignment of debt claims by Teesside to a wholly owned subsidiary Teesside Recoveries and Investments was GAAP compliant; but that FA 1996 s 84(1) required Teesside to bring into account for tax purposes a sum representing the value of the shares allotted to it in exchange for the assignment.
Teesside had transferred substantial debt claims (totalling over $1bn) that it held against the Enron group to a wholly owned subsidiary Teesside Recoveries which was incorporated and tax resident in Jersey. In its notification of the scheme under DOTAS Teesside had explained that the scheme worked by enabling a UK company to indirectly realise the value of an existing asset which has no carrying value under UK GAAP ‘without...
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: