The UK Court of Appeal in October 2019 issued its decision in a case concerning a claim for withholding tax on manufactured overseas dividends.
The Court of Appeal affirmed a decision of the Upper Tribunal, finding that HM Revenue & Customs (HMRC) withholding tax rules on manufactured overseas dividends prior to 1 January 2014 were a “restriction” on the free movement of capital and dismissing the justifications for this restriction.
The decision is positive news for the test claimant and other registered pension schemes; still, it remains to be seen whether HMRC will seek leave to appeal this decision to the Supreme Court.
The decision also generally supports the position for other claimant types that are not registered pension schemes—including life insurance companies and investment funds. However, these other claimant types might require further clarification given the conforming interpretation proposed by the courts.
Read an October 2019 report prepared by the KPMG member firm in the UK
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