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Kwik-Fit Group Ltd and others v HMRC

In Kwik-Fit Group Ltd and others v HMRC [2024] EWCA Civ 434 (3 May 2024) the Court of Appeal (CA) upheld the decisions of the First-tier Tribunal (FTT) and the Upper Tribunal (UT) that the appellants had an unallowable purpose in being party to loan relationships.   

The appellants were party to an intra-group debt reorganisation under which (i) loan receivables owed by the appellants were assigned to an intermediate holding company Speedy 1 Ltd (Speedy 1) (the ‘assigned loans’) (ii) new loan receivables were created in Speedy 1’s favour (the ‘new loans’) and (iii) the interest rates on the assigned loans as well as a loan that one of the appellants already owed to Speedy 1 (the ‘pre-existing loan’) were increased to reflect the arm’s length interest rate at the time.

Speedy 1 had around £48m of non-trading loan relationship deficits (NTLRDs) carried forward from earlier...

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