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Next Brand Ltd (TC4368)
The issue was whether or not the taxpayer company was entitled to double tax relief.
The business claimed a dividend paid by its Hong Kong subsidiaries and worth about HK$1.45bn was means by which profits from Asia could be brought to the UK.
The dividend would be chargeable to tax ordinarily under schedule D case V (TA 1988 s 18) but it was claimed that the double tax relief provisions in TA 1988 s 788 to s 812 applied a result of arrangements between the taxpayer and other members of its trading group.
HMRC refused the claim saying the larger part of the dividend was the repayment of a loan and therefore not derived from taxed profits.
The taxpayer appealed.
The First-tier Tribunal said the relevant provisions on the payment of dividends referred to income gains and profits. It represented “the payment...
