Barclays Bank plc v HMRC

In Barclays Bank plc v HMRC [2024] UKFTT 246 (TC) (21 March 2024) the First-tier Tribunal (FTT) considered the treatment under the loan relationship provisions of debt instruments issued by a subsidiary of the Barclays Group in order to increase its capital ratios in response to the 2008 financial crisis. The FTT dismissed the company’s appeal against HMRC’s decision to disallow loan relationship debits said to arise on the discount at which the instruments were issued.

In late 2008 the Barclays group entered into the following transactions in order to increase its Tier 1 capital ratios and avoid the need for a government bail-out. A subsidiary of Barclays (BBplc) issued £3bn of reserve capital instruments (RCIs) to two strategic investors and some other institutional investors. At the same time parent company Barclays (not BBplc) issued five-year share warrants over its own shares for a nominal sum to the...

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