09 August 2023

HMRC -V- JTI Acquisitions Company Ltd

The Upper Tribunal has released its decision in the case of JTI Acquisition Company Limited v HMRC upholding the decision of the FTT. 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. The Appellant appealed to the Upper Tribunal. That appeal has now been dismissed.

Elizabeth Wilson KC and Rebecca Sheldon of Old Square Tax Chambers represented HMRC.

To view a copy of the decision, please click here