Originally printed in Tax Journal on 11 May 2016
The Court of Appeal has handed down its judgment in the Prudential case, in what is hoped to be one of the final steps of this long lasting action between taxpayers invested in cross border portfolio holdings and HMRC. HMRC’s appeal was allowed on three esoteric issues of computation relating to ACT but was otherwise dismissed. The judgment sends out a broader message: it is not permissible, as HMRC sought to do in relation to ACT, to disregard the legislative system and seek to superimpose a newly devised system to replace it in circumstances where EU law was engaged. The issue of Prudential’s entitlement to compound interest remains subject to further litigation. Simon Whitehead and Philippe Freund (Joseph Hage Aaronson), who acted for the taxpayers, summarise the outcome of this judgment and explain why it has taken so long.
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