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First-tier Tribunal decision on consortium relief

First-tier Tribunal decision on consortium relief

This case considers a technical point within the consortium relief legislation.


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A recent First-tier Tribunal (FTT) case considered the operation of CTA 2010, s 146B which limits the amount of consortium relief where certain arrangements exist – specifically, arrangements which enable a person to prevent the surrendering company or a link company from controlling the claimant company where the purpose, or one of the main purposes, of the arrangements is to enable the claimant company to obtain a tax advantage from consortium relief.

The FTT concluded that CTA 2010, s 146B does not apply to an arrangement where there is no pre-existing control. This enabled it to decide that questions relating to purpose which HMRC were seeking to answer were not relevant and HMRC therefore had no reason not to issue a closure notice.

The FTT declined to answer two other technical issues on the same legislation on the basis that they were questions of law on the construction of a document and could be decided (on an appeal in due course if necessary) without any further factual information.

The decision also contained some minor administrative points of interest. The FTT rejected HMRC’s contentions that:

  • A direction to close the enquiry could not be issued while information notices were outstanding; and
  • The applicants, by giving consent to the issuing of a group information notice, had admitted that the information requested therein was relevant to the enquiry.

For further information please contact:

Stephen Whitehead

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KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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