The Ardmore case concerned whether interest arose in the UK such that there was an obligation to withhold tax.
The Court of Appeal has found for HMRC in a case regarding whether a source of interest arose within the UK and a company was obliged to withhold income tax on payments of interest. The interest was paid by Ardmore, a company resident in the UK, on unsecured loans from a non UK resident lender that were governed by non-UK law. The Court of Appeal confirmed that the test of the source of an interest payment is not merely multifactorial but also practical and acutely fact-sensitive; the court or tribunal must examine all the available facts both singly and cumulatively.
The following factors were significant in arriving at the decision.
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