Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Limit placed on consortium relief

23 January 2020
Issue: 4729 / Categories: Tax cases

CRC v South Eastern Power Networks plc and others, Upper Tribunal (Tax and Chancery Chamber), 24 December 2019 

A consortium of five shareholders Devin Eagle CKI1 CKI2 and CKI3 owned UK Power Networks Holdings Ltd of which the taxpayers were trading subsidiaries. The CKI companies held 74.6% of the voting rights. The taxpayer companies made profits and claimed consortium relief (CTA 2010 s 130) on losses made by the Hutchinson companies – ultimate owners of the consortium shareholding companies.

The issue was whether CKI3 had been deprived of its voting power so that the CKI companies no longer held 74.6% of the voting rights in which case CTA 2010 s 146B applied to limit relief by 50%.

The First-tier Tribunal decided in favour of the taxpayers so HMRC appealed.

The Upper Tribunal noted that s 146B(2)(b) applied when arrangements were in place that enabled ‘a person to prevent the link company either alone or together with one or...

Only subscribers may read the full article

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.
back to top icon