FCE Bank Plc v Revenue & Customs [2010] UKFTT 136 (TC) (01 April 2010)

FCE Bank Plc v Revenue & Customs [2010] UKFTT 136 (TC) (01 April 2010)

The denial of group relief to UK subsidiaries of a US parent company is discrimination prohibited by Article 24(5) of the US-UK double taxation treaty, as the sole ground for denial is the residence of the parent company. No other ground for the difference in treatment exists. The Treaty requires that group relief...

Source-derived case information.

Citation
[2010] UKFTT 136
Parties
Appellant: FCE Bank Plc; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
01 April 2010
Procedural Posture
Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal allowed
Legal Topics
Group Relief, Double Taxation, Non Discrimination in Tax Treaties
Taxation International Tax Corporation Tax Group Relief Double Taxation Non Discrimination in Tax Treaties

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Parties

FCE Bank Plc

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether the non-discrimination article in the US-UK double taxation agreement entitles UK subsidiaries of a US holding company to group relief
  2. 2 Whether denial of group relief constitutes discrimination prohibited by Article 24(5) of the Treaty

Ratio Decidendi

The denial of group relief to UK subsidiaries of a US parent company is discrimination prohibited by Article 24(5) of the US-UK double taxation treaty, as the sole ground for denial is the residence of the parent company. No other ground for the difference in treatment exists. The Treaty requires that group relief be available between UK subsidiaries owned by a US parent in the same way as if the parent were UK resident.

Court Disposition

Appeal allowed

Orders

  • Group relief is available between UK subsidiaries of a US parent company under Article 24(5) of the US-UK double taxation treaty.
  • HMRC must repay corporation tax overpaid by FCE Bank Plc and other Ford group companies for the relevant periods, subject to final agreement on amounts.