In Aozora GMAC Investment [2022] UKUT 258 (TCC) (23 September 2022) the Upper Tribunal (UT) dismissed HMRC’s appeal upholding the First-tier Tribunal (FTT) decision that the relevant legislation at the time ICTA 1988 s 793A(3) (now found in TIOPA 2010 s 11(3)) did not deny unilateral relief by way of credit for US withholding tax on interest even though the taxpayer was not entitled to relief under the UK-US double tax treaty (DTT) as a result of the limitation on benefits provision.
Aozora received interest payments net of withholding tax from its US subsidiary. The US tax authority denied Aozora’s application to access the benefit of the UK-US DTT on the grounds that Aozora was not a qualified person within the meaning of article 23 on the limitation on benefits. The US tax authority also declined to use its discretion under article 23(6) to allow...
