A complex series of tranactions involving millions of pounds of director’s loans between subsidiaries and the group holding company was not used for tax avoidance purposes, GAAR Advisory Panel decides
This opinion covers the repayment of a participator loan through transactions involving group companies, where the GAAR Advisory Panel was investigating whether the company used the scheme to avoid paying corporation tax.
The un-named company, called Z in the decision, had been in business for some years and was the parent of an active group of companies; for the period ended 31 May 2014, it recorded a post-tax profit of over £60m. In 2016 the company was restructured and ownership was transferred to a holding company.
The dispute with HMRC arose due to the tax treatment of loans to participators and the charge to tax under s455 Corporation Tax Act 2010 (CTA 2010). However, the GAAR panel said that on this occasion the loans ‘did not appear to involve what might be termed a marketed pre-packaged scheme with unusual and apparently non-commercial steps’.
A
