The Trustees of the BT Pension Scheme v HMRC

In The Trustees of the BT Pension Scheme v HMRC (Case C-628/15) (14 September 2017) the CJEU confirmed that the BT Pension Scheme should be granted effective legal remedies to recover the tax credits it was entitled to in relation to foreign income dividends (FIDs).

The BT Pension Scheme held shares mainly in large publicly quoted companies in the UK the EU and third countries. Under the ACT regime (abolished with effect from 6 April 1999) as pension schemes had virtually no taxable income (against which tax credits could be offset) credits gave rise to payments by HMRC. However the receipt of FIDs (dividends paid by a UK company in relation to income received by it from its subsidiaries) did not entitle the recipient to a tax credit (ICTA 1988 s 246C). The recipient was instead deemed to have borne tax at the lower rate;...