Bristol and West, owned by the Bank of Ireland, has lost an attempt at the First Tier Tribunal (FTT) to avoid paying around £30m tax on a £91m gain.

In the case of Bristol & West plc v Commissioners for HMRC [2013] UKFTT 216 (TC) , the company transferred a swap contract to another Bank of Ireland subsidiary in a flawed attempt to exploit what it thought was a loophole in the tax rules.

The bank's theory was that the £30m tax would disappear on the cancellation of the original contract and its replacement with a new one. It entered into a swap transaction for commercial hedging reasons, but decided to transfer the swap to another Bank of Ireland subsidiary to exploit a perceived weakness in rules on the taxation of swaps in Finance Act 2002.

The FTT in March upheld HMRC's view that there is in fact no loophole to exploit. Bristol & West has the right to appeal the decision within a 56-day notice period.

Treasury secretary, David Gauke, said: 'HMRC will challenge avoidance schemes that risk denying the Exchequer vital tax revenues and will pursue to litigation when necessary.'

The FTT decision is available HERE

Six corporate tax loopholes were closed by Budget 2013, protecting over £1bn in revenue and yielding over £500m in missing tax revenue.