Ardmore v HMRC

In Ardmore v HMRC (TC03580 – 13 May 2014) the FTT found that payments made by a UK company to offshore trusts and companies arose in the UK.

Ardmore was appealing against HMRC’s decision to tax interest it had paid to offshore trusts and companies on the basis that the interest arose in the UK (ITA 2007 s 957). Ardmore was a construction company owned by two brothers in equal shares. The company held shares in BVI companies which were controlled by family trusts established by the two brothers. During the tax year 2007/08 the interest paid by Ardmore was more than £5m which was funded by its UK trading activities. HMRC contended that Ardmore should have withheld tax on the interest payments. A decision of the FTT in 2004 had turned on a similar point; Perrin v HMRC [2014] UKFTT 223. However the judge had referred...