Newspaper companies: payments to holding company
In Iliffe News & Media Ltd v HMRC (and related appeals) (TC02365 – 22 November) a group of companies published several regional newspapers. Several subsidiary companies assigned unregistered trade mastheads to their parent company and then paid a lump sum to the parent company to license the trade marks for a fixed term. The purpose of these transactions was described as being ‘to reduce reported profits in the newspaper subsidiaries since the levels of profit become common knowledge and could lead to union claims’. The subsidiaries claimed a deduction for the payments they had made to the parent company although the parent company treated the payments it received as outside the scope of corporation tax. HMRC rejected the subsidiaries’ claims and the First-tier Tribunal dismissed the companies’ appeals. Judge Walters held that it was a principle of common law that...
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Newspaper companies: payments to holding company
In Iliffe News & Media Ltd v HMRC (and related appeals) (TC02365 – 22 November) a group of companies published several regional newspapers. Several subsidiary companies assigned unregistered trade mastheads to their parent company and then paid a lump sum to the parent company to license the trade marks for a fixed term. The purpose of these transactions was described as being ‘to reduce reported profits in the newspaper subsidiaries since the levels of profit become common knowledge and could lead to union claims’. The subsidiaries claimed a deduction for the payments they had made to the parent company although the parent company treated the payments it received as outside the scope of corporation tax. HMRC rejected the subsidiaries’ claims and the First-tier Tribunal dismissed the companies’ appeals. Judge Walters held that it was a principle of common law that...
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