The Court of Appeal ruled unanimously in favour of the taxpayer in First Nationwide concerning dividends from share premium. Matthew Herrington reviews the wider implications.
Background
On 13 March the Court of Appeal ruled unanimously in favour of the taxpayer in what has become the final instalment of the First Nationwide litigation. The facts of the case have been explained at length in previous editions of Tax Journal and it is not proposed to set them out in full here. In brief however the case involved a UK investment company (First Nationwide) seeking a deduction in the form of management expenses for manufactured overseas dividends paid in respect of a stock loan of shares in a Cayman Islands company (Blueborder). HMRC had denied the deduction...
