BlackRock Holdco 5 LLC v HMRC

In BlackRock Holdco 5 LLC v HMRC [2024] EWCA Civ 330 (11 April 2024) the Court of Appeal (CA) found that interest payments on intra-group loans put in place as part of the funding structure for a commercial acquisition were not restricted by transfer pricing rules but were disallowed under the loan relationships unallowable purpose rule.

The taxpayer (LLC5) was a Delaware-incorporated UK resident company formed as part of the structure for the acquisition by the BlackRock group of the Barclays Global Investor business in 2009. LLC5 issued several tranches of loan notes to its immediate parent company LLC4 and claimed non-trading loan relationship debits for the interest paid on the loans over a period of years. It acquired preference shares in LLC6 which made the acquisition. HMRC disallowed the debits arising to LLC5 on two grounds: that the loans differed from those that would have...