Originally printed in Tax Journal on 21 Oct 2016.
Henderson J handed down judgment in Six Continents v HMRC [2016] EWHC 2426 (Ch) on 5 October 2016. The issues concerned what foreign profits should receive credit at the foreign nominal rate in accordance with the ruling of the CJEU in Test Claimants in the FII Group Litigation v HMRC (Case C-35/11). The judgment holds that Six Continents are entitled to a credit at the FNR on the underlying foreign profits which incorporated adjustments to the commercial profits for the revaluation of shareholdings, the release of warranty provisions and exchange rate adjustments which were removed for local tax. It also held that the same credit would apply to capital gains even though exempt under the Dutch participation exemption.
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