JTI Acquisition Company (2011) Ltd v HMRC

In JTI Acquisition Company (2011) Ltd v HMRC [2024] EWCA Civ 652 (13 June) the Court of Appeal (CA) dismissed the taxpayer’s appeal against the disallowance for corporation tax purposes of debits in respect of interest payable on loan notes. The CA agreed with the First-tier Tribunal (FTT) and the Upper Tribunal (UT) that the taxpayer was party to the loan notes for an unallowable tax avoidance purpose under the loan relationships rules and not for any commercial purpose.

JTI Acquisition Company (2011) Ltd (JTIAC) the appellant was a UK-resident company newly incorporated by a US group for use as an acquisition vehicle. The US group had entered into a commercial agreement to acquire another US-headed group (LTT) for $1.1bn. JTIAC raised half of the purchase price through debt pushed down from the US effected by JTIAC issuing interest-bearing loan notes to a US member of its...