The taxpayer’s application for judicial review on the basis of legitimate expectation has been rejected.
In the case of Aozora GMAC Investment Ltd v Revenue And Customs, the taxpayer was denied UK corporation tax relief for US tax withheld on interest paid from a subsidiary. They contended in their claim for judicial review that wording in HMRC’s International Manual (since corrected) gave rise to a legitimate expectation that their claim for double taxation relief would have been allowed. The High Court has rejected their application, ruling that while a line in HMRC’s guidance was found to be a relevant representation that the taxpayer was entitled to rely on in principle, they were not required to give effect to it. This was because the Court found no evidence that the taxpayer had relied on this guidance or suffered any detriment, let alone that it would be conspicuously unfair for HMRC to have caused the detriment.
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