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HMRC guidance could be relied upon but appellant had not suffered serious detriment in doing so

By Mark McLaughlin, December 2019

HMRC guidance in one of its manuals was a ‘relevant representation’ but the appellant failed to show that in doing so it had suffered a serious detriment.  
 
The appellant company (AUK) was the wholly owned subsidiary of a Japanese parent company (AJ). AUK established a wholly owned subsidiary (AUS), which was resident in the US for tax purposes. During its accounting periods ended 31 March 2007 to 31 March 2009, AUK made loans to AUS and received interest payments. The US imposed withholding tax (at 30%) on the interest received. AUK was liable to corporation tax in the UK on the interest received from AUS. 
 
HM Revenue and Customs (HMRC) denied AUK relief under ICTA 1988, s 790 in respect of the withholding tax imposed by the US in the above periods, on the basis that ICTA 1988, s 793A operated to prevent the availability for relief under s 790. The appellant made a claim for judicial.

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