COURT OF APPEAL DECISION IN FAVOUR OF HMRC

The Court of Appeal has allowed the appeal of HMRC in this case concerning the US/UK Double Tax Treaty.  While the Court of appeal upheld the First-tier Tribunal and Upper Tribunal’s decision that General Electric Financial Investments Ltd (“GEFI Ltd”) did not have a permanent establishment in the US, it overturned the UT’s decision on Treaty residence meaning that HMRC succeeded overall.

The case addresses both the residence article and the permanent establishment article (including the meaning of “business”), and their application to the US concept of “share stapling”.

Philip Baker KC and John Brinsmead-Stockham KC acted for GEFI Ltd (Respondent) and were instructed by Slaughter & May.

Hui Ling McCarthy KC and Barbara Belgrano acted for HMRC (Appellant).

The Court of Appeal’s decision can be found here.