Court upholds Ford's UK tax relief appeal

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Companies outside the EU will find it easier to claim tax relief on UK subsidiaries following a recent Court of Appeal ruling.

The court ruled that US car maker Ford is entitled to group tax relief on its UK subsidiaries FCE Bank and Ford Motor Company Limited.

Before 2000, a group relationship for UK tax purposes could not be traced through non-UK resident companies. 

HMRC therefore refused a claim for group relief by FCE from its sister company Ford Motor Company Limited, because both were directly owned UK resident subsidiaries of Ford Motor Company. 

FCE maintained that it was entitled to that claim, relying on the US-UK double tax treaty.

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By Ian Bee
30th Nov 2012 09:03

Corporation Tax memories

Those of us who have been around for a few years will remember this as being something of a hazard to international groups until 2000. The way round it was to insert a UK subholding company. This was not always easy to do, depending on how the UK subs had been acquired in the first place.

It would be interesting to know why Ford did not manage to do this, and perhaps the details of the case will tell us.

Also interesting to know how many protective claims might have been made by companies in a similar position. This largely predated self assessment so there would have been a two year time limit to make the claim (from memory).

 

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By hiu612
03rd Dec 2012 14:11

Immoral Global Companies...

Imagine Ford looking to use UK group losses against UK group profits. . . good to see that the moral boot doesn't fit the other (HMRC) foot.

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