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.