The last in a trilogy of recent Court of Appeal cases on ‘unallowable purpose’ has seemingly extended its ambit yet further, writes Constantine Christofi (EY).
The facts of the appeal in JTI Acquisition Company (2011) Ltd v HMRC [2024] EWCA Civ 652 (JTIAC) can be shortly stated.
JTIAC a newly incorporated company resident in the UK was a member of a corporate group with its ultimate parent (Joy Global) in the US. It borrowed intra-group in order to acquire the shares in another company (LTT) from a third-party vendor for c.$1.1bn. The financing for the purchase was on arm’s length terms and was directly used to acquire LTT. HMRC nevertheless disallowed JTIAC’s non-trade loan relationship debits because it claimed the entering into the loans used to fund the acquisition had a main purpose of securing a tax advantage. That was principally because Joy Global...
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The last in a trilogy of recent Court of Appeal cases on ‘unallowable purpose’ has seemingly extended its ambit yet further, writes Constantine Christofi (EY).
The facts of the appeal in JTI Acquisition Company (2011) Ltd v HMRC [2024] EWCA Civ 652 (JTIAC) can be shortly stated.
JTIAC a newly incorporated company resident in the UK was a member of a corporate group with its ultimate parent (Joy Global) in the US. It borrowed intra-group in order to acquire the shares in another company (LTT) from a third-party vendor for c.$1.1bn. The financing for the purchase was on arm’s length terms and was directly used to acquire LTT. HMRC nevertheless disallowed JTIAC’s non-trade loan relationship debits because it claimed the entering into the loans used to fund the acquisition had a main purpose of securing a tax advantage. That was principally because Joy Global...
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