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Abbey National Treasury Services v HMRC

In Abbey National Treasury Services v HMRC [2015] UKFTT 341 (14 July 2015) the FTT found that a dividend paid on a share tracker was not an allowable debit and fell within the scope of the transfer pricing rules.

As part of a derivative transaction with another bank Abbey National Treasury Services (ANTS) had issued tracker shares to its parent company (Abbey). The tracker shares entitled Abbey to receive a non-cumulative dividend in respect of swap cash flows to be received by ANTS. The issues in dispute were whether the £160 million dividend payable to Abbey was deductible as a debit arising from ANTS’ derivative contracts under FA 2002 Sch 26 (now CTA 2009 s 595(3)); and whether the transfer pricing rules (ICTA 1988 Sch 28AA) applied to the tracker shares.

The FTT observed that for legal purposes ANTS had not disposed of any rights; and that...

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