Tax Credit Claims Made Out Of Time
The BT Pensions Scheme case concerns claims by a large number of pension funds to recover credits under section 231 ICTA 1988 upon the receipt of non-resident dividends in circumstances where such credits were received on dividends from UK resident companies. The current litigation concerns whether or not the claims were not made in time.
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Advocate-General’s Opinion in Case C-48/13 Nordea Bank Danmark A/S
The A-G opined that the Danish rules in question were incompatible with EU law. Notably, she considered that the prevention of tax evasion could not justify the way in which the Danish rules restricted the freedom of establishment and that these rules were unnecessarily excessive. Key features of the A-G’s opinion included: (1) the observation that the Danish rules are disproportionate as they would also apply to cases where a foreign permanent establishment is in liquidation; and (2) the rules fail to acknowledge the possibility that companies may have reasonable commercial grounds for transferring activities.
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Advocate-General’s Opinion in Joined Cases C-39/13, C-40/13 and C-41/13 SCA Group Holding & Ors
The three joined cases before the ECJ concerned different group structures, although each had the common feature of having members of the corporate group established in another Member State. The Advocate-General considered that there was a restriction of freedom of establishment in respect of both a non-resident parent company with foreign subsidiaries, and a resident parent company with foreign subsidiaries. She also considered that there was no justification for these restrictions.
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Budget 2014
Budget 2014 was announced today. A key feature of the Chancellor’s speech concerned HMRC’s draft legislation (published on 28 February 2014) to be included in the Finance Bill 2014 in respect of mistake-based time limits.
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High Court judgment in Littlewoods case
The decision of the High Court in the Littlewoods case on the availability of compound interest on claims for the recovery of unlawfully levied VAT was handed down today by Mr Justice Henderson. The Claimants have been successful. The judgment has significance for all EU claims where compound interest is sought.
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When can taxpayers claim group relief for losses sustained elsewhere?
This case concerned the availability of cross border group relief, in particular the circumstances in which such relief could be obtained by a UK parent company of trading subsidiaries in other member states in the EU. Originally published on LexisPSL Tax, 24 February 2014.
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Marks & Spencer Group Relief Case: Final Supreme Court Judgment
This morning the Supreme Court delivered its second and final ruling in the M&S case. Like its first judgment last May, this judgment is unanimous and in favour of the taxpayer on the key remaining issues. No questions have been referred to the ECJ. This judgment should therefore conclude the litigation. The team has worked on the case for 11 years and 1 month.
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Unjust Enrichment Defence Compatible with Equal Treatment
Section 3 of the Finance Act (No.2) 2005 introduced an unjust enrichment defence against claims for repayment of VAT. This defence came into force on 26 May 2005. The claimant challenged the application of the defence to pre 2005 claims on the basis that the defence was incompatible with the EU law principle of equal treatment. The Court of Appeal found that the defence introduced in section 3 did not breach EU law and that HMRC could rely upon it.
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Exit Taxes
The ECJ ruled that Article 63 TFEU should be interpreted as meaning that the legitimate objective of maintaining the balanced allocation of the power to impose taxes between Member States may justify a difference in the treatment of investors but only if it was impossible for Germany to tax capital gains, once realised. It was further ruled that where the taxation of unrealised capital gains is concerned, it is proportionate for the taxable person to be provided with the following payment options: (1) staggered; or (2) immediate.
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FII and Dividend Tax Update
In the Prudential case (Portfolio Dividend Tax and Life Assurance) the High Court has now given permission to both parties to appeal to the Court of Appeal. HMRC’s permission however was restricted, so that it cannot appeal on the issues connected with its “change of position defence” or the nominal rates of tax to apply. In the FII Group Litigation yesterday the High Court refused permission for HMRC to run two new defences on the grounds that they had been raised too close to trial and would impose extreme evidential burdens on the Claimants. The trial of the FII test cases is set for May.
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