Tax case - M&S

Partial victory

The European Court of Justice has ruled that the UK's group relief rules must allow losses made by EU subsidiaries to be relieved against the profits of UK group companies but only where those losses cannot be relieved against profits in the subsidiary's country. This ruling follows the Advocate General's opinion given in spring; see 'Mixed result' Update Taxation 21 April 2005 page 67.
Marks & Spencer claimed group relief in respect of losses made by its subsidiaries in Belgium Germany and France under TA 1988 Sch 17A para 6. However under UK legislation companies in a group may set off their profits and losses among themselves but not where the losses are incurred by subsidiaries which are not established in the UK and do not trade there. Citing breach of Article 43 of the EC Treaty...