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Ardmore Construction v HMRC

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In Ardmore Construction v HMRC [2018] EWCA 1438 (21 June 2018) the Court of Appeal found that interest paid by a UK company under a foreign loan facility was UK sourced.

Ardmore was a UK resident company owned and managed by two brothers. Its assets and activities were almost entirely in the UK. Using working capital it had subscribed for shares in two companies incorporated in the British Virgin Islands (BVI) and owned by Gibraltar trusts established by the brothers. The sum of £1.35m which was the amount subscribed (by way of part payment of share premium) by Ardmore to the BVI companies was lent by those companies to the trusts and by the trusts to Ardmore in the latter case under a facility letter dated June 2005.

The issue was whether the interest...

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