On 22 January 2016 Henderson J awarded summary judgment to a number of claimants in the FII GLO on their claims for restitution of ACT paid on foreign income dividends (FIDs).
The judge found that the FID issue in the FII GLO has now been conclusively determined in the BAT test case and that the claimants’ FID claims were in an identical position to the BAT claimants. Accordingly, they were entitled to final judgment on that part of their claim, and their applications for summary judgment were largely successful.
It was determined in the Sempra Metals case that the time value of ACT between payment and repayment is calculated on a compound interest basis and in FII (High Court) II that the rate was a 10 year moving average of the yield on 10 year gilts compounded 6 monthly (i.e. the rate applied in valuing the FID claims). Those issues are no longer in dispute and therefore the Judge accepted that the claimants’ claims are to be computed on that basis.
However, the issue of whether simple or compound interest should be awarded for the period following repayment of the ACT is still being litigated in the Littlewoods case, which has now been granted permission to appeal by the Supreme Court (see below). The judge therefore concluded that the claimants are not at present entitled to final judgment for that portion of the compound interest claim. That issue has now been put on hold pending determination of the Littlewoods litigation.
This article appears in the JHA February 2016 Tax Newsletter, which also features:
