BlackRock Holdco 5 LLC v HMRC

In Blackrock Holdco 5 LLC v HMRC [2020] UKFTT 443 (TC) (3 November 2020) the First-tier Tribunal (FTT) found in favour of the taxpayer in respect of both a transfer pricing challenge and an unallowable purpose challenge to the taxpayer’s loan relationship debits on intra-group debt in the context of a third party corporate acquisition.

Blackrock Holdco LLC 5 (LLC 5) issued several tranches of loan notes to its parent company as part of the acquisition structure for the Barclays Global Investor (BGI) business in 2009. LLC 5 claimed deductions on the interest paid on the loans over a period of approximately six years.

HMRC challenged the deduction of interest on two grounds:

whether the loans differ from those that would have been made between independent enterprises (the transfer pricing question); and
whether securing a tax advantage for LLC 5 (or another person) was a main purpose of LLC 5 being a party...

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