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First-tier Tribunal upholds group relief claims

LINPAC Group Holdings Ltd v HMRC [2020] UKFTT 60 (TC)

LINPAC Group Holdings (“Holdings”), a global plastics supplier, has successfully overturned HMRC’s rejection of c£40 million of group relief claims (>£10m tax at stake) before the First-tier Tribunal (Tax Chamber) (“FTT”). 

Holdings made domestic claims for group relief in respect of losses of group companies in the United Kingdom.  Subsequently, Holdings made further cross-border claims for group relief (including in respect of losses of group companies in other EU member states) totalling c£40 million.  At the time that the cross-border claims were made, the requirements for making such claims were unclear.  Holdings later accepted that its cross-border claims did not meet the relevant criteria for entitlement and sought, instead, to pursue its domestic group relief claims. 

HMRC contended that the making of the cross-border claims entailed the withdrawal of the domestic claims, that it was too late for new domestic claims to be advanced and that, in consequence, >£10 million of unpaid corporation tax liabilities arose for Holdings. 

The FTT allowed Holdings’ appeal, concluding that: (a) the making of the cross-border claims did not involve the withdrawal of the domestic claims (rather, the cross-border claims had been advanced by Holdings in the alternative to the domestic claims); (b) Holdings had withdrawn its cross-border claims; and (c) only Holdings’ domestic claims remained extant, with the result that Holdings remained entitled to pursue its domestic claims.  

Jonathan Bremner QC, instructed by Joseph Hage Aaronson LLP, acted for LINPAC Group Holdings.  You can view the full Decision here