Yesterday, the Court of Appeal delivered its judgment in the FII Group Litigation case confirming Henderson J’s judgment of 18 December 2014. This means that the method of computing double tax relief on EU sourced dividend income in the period 1973-1999 remains as established by the judge:
- EU dividend income is not exempt but carried a credit at the higher of the actual tax paid or foreign nominal rate (FNR);
- credit remains for withholding tax;
- mixed dividend income is not streamed. The double tax relief on dividends incorporating multiple sources is established by increasing credits for the FNR where applicable and establishing a weighted average in the same manner as the provisions at the time;
- the complex computational issues concerning ACT determined in the tax payers’ favour by the judge remain in place.
The only alteration to the judge’s judgment of note is that the Court of Appeal has overturned his finding on the date from which the extended 6 year period for issuing High Court claims runs. The judge had held that High Court claims had to be issued within 6 years of 8 March 2001. The Court of Appeal has amended that date to 12 December 2006.
HMRC’s application to appeal to the Supreme Court is pending.
This article appears in the JHA November 2016 Tax Newsletter, which also features:
- Chancellor’s Autumn Statement by Steve Bousher and Helen McGhee
- C-68/15 X – Attorney General’s Opinion on Belgian “fairness tax” by Christopher Kientzler
- The Council of the European Union agrees Criteria for the Screening of Third-Country Jurisdictions as Non-Cooperative Jurisdictions by Cristiana Bulbuc
