UK Care No. 1 Ltd v HMRC

In UK Care No. 1 Ltd v HMRC [2024] UKFTT 542 (TC) (13 June) the FTT considered the disallowance of imported losses provisions at CTA 2009 s 327. The provisions operate to disallow a loss in connection with a loan relationship to the extent that the loss is ‘referable’ to a time when the company seeking to bring the loss into account would not have been subject to corporation tax on any profits from the loan relationship.   

The appellant was a Guernsey tax resident company which issued certain loan notes secured by the UK care home business of the BUPA group.  In 2016 BUPA wanted to sell a number of care homes which were part of the security arrangements for the loan notes. In order to do so BUPA acquired the appellant (with the appellant becoming UK tax resident) and the loan notes were subsequently redeemed by the...