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Prudential Assurance Company v HMRC

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In Prudential Assurance Company v HMRC [2018] UKSC 39 (25 July 2018) the Supreme Court found that Prudential was not entitled to compound interest on advance corporation tax (ACT) wrongfully levied.

The appeal related to  ‘portfolio dividends’ (dividends derived from holdings of less than 10% of the shares in the companies concerned) paid by non-resident companies to Prudential a company resident in the UK. Prudential was a test claimant in a long standing group litigation which had included a decision by the CJEU (Case C-446-04). The appeal arose from the fact that during the relevant period (1990 to 2009) such portfolio dividends were in principle taxable and (until 1999) ACT was levied on dividends distributed to UK companies’ shareholders.

The Supreme Court had to decide four principal issues.

The first issue was whether EU law requires a tax credit...

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