The Court agreed with HMRC regarding the basis on which the claimants were entitled to recover interest, allowing HMRC’s appeal and limiting the claimants to statutory interest under Finance Act 2019 only. Now the case will return to the High Court for further deliberation.

The claimants’ appeals on group relief, management expenses, and enrichment were allowed, while the arguments on surrendering advance corporation tax were dismissed.

This appeal arises in the course of long-running proceedings, dating from the 1980s, known as the Franked Investment Income (FII) Group litigation. This brings together many claims concerning the tax treatment of dividends received by UK-resident companies from non-resident subsidiaries, as compared with the treatment of dividends paid and received within wholly UK-resident groups of companies. The respondents to this appeal are claimants within the FII Group Litigation (the claimants) whose cases have been selected to proceed on certain common issues against the Appellant, the Commissioners for HMRC.