19 April 2022

JTI Acquisition Company Ltd v HMRC; (FTT)

The First-tier Tribunal has released its decision in the case of JTI Acquisition Company Limited v HMRC.

Joy Global Inc, which manufactures mining equipment entered into a $1billion stock purchase agreement, borrowing $500m. It then set up a ‘check the box’ company (the Appellant) to take the assignment funded by intercompany debt. The issue was whether the Appellant’s borrowing had an unallowable purpose for the UK CT loan relationship rules.  The FTT found that it had such a purpose and that the whole of the debits claimed were unallowable. Euromoney (FTT) is mentioned and distinguished (at [172]).

Elizabeth Wilson QC instructed by HM Revenue and Customs, for the Respondents.

Click here, to see the full decision.