Appointment of receivers and group relief from UK corporation tax

Published on
1 min read

Receivers were appointed over property of PH2L by the bank and the question that arose was whether the parent company retained control over PH2L for the purposes of claiming group relief from corporation tax.

The Court of Appeal said that while it is commonplace to talk of control of a company residing with its shareholders, because they have the power to decide how the company is run in accordance with its articles of association; once the functions of PH2L’s Board were superseded by the appointment of receivers, the shareholders could no longer intervene to have the company run in accordance with their wishes. PH2L was then being run for the primary benefit of its secured creditors and its shareholders could do nothing to prevent this. There was therefore insufficient control of PH2L for a group company to claim relief for PH2L’s losses of over £10m.

Farnborough Airport Properties Company v HMRC [2019] EWCA Civ 118

Mills & Reeve Sites navigation
A tabbed collection of Mills & Reeve sites.
My Mills & Reeve navigation
Subscribe to, or manage your My Mills & Reeve account.
My M&R
Register or login

Register or login Get all the benefits of MyM&R but registering or logging in ulla vehicula mauris mattis hendrerit fermentum. Etiam placerat hendrerit dapibus. Praesent ligula felis, eleifend sed odio quis, feugiat eros. Aliquam vitae felis fermentum, posuere nulla ut, maximus magna.

Staff intranet
Log in to the intranet
Client extranet
Log in to the extranet