The Court of Appeal decision in BlackRockallays the main concerns caused by the lower tier decisions. In the transfer pricing context, it considers whether features not present in the actual transaction can be imported into the hypothetical arm’s length transaction to enable a comparison exercise. It also gives clear guidance that the availability of tax relief for interest on a loan does not, without more, mean that the borrower has a tax avoidance purpose in entering into the loan and provides a welcome steer on what may be permissible in conducting a just and reasonable apportionment exercise.
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The Court of Appeal decision in BlackRockallays the main concerns caused by the lower tier decisions. In the transfer pricing context, it considers whether features not present in the actual transaction can be imported into the hypothetical arm’s length transaction to enable a comparison exercise. It also gives clear guidance that the availability of tax relief for interest on a loan does not, without more, mean that the borrower has a tax avoidance purpose in entering into the loan and provides a welcome steer on what may be permissible in conducting a just and reasonable apportionment exercise.
If you are not a subscriber, subscribe now to read this content.
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