FCE Bank Plc v Commissioners for Her Majesty's Revenue and Customs
Decision date: 1 April 2010
Neutral citation: [2010] UKFTT 136 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
FCE Bank Plc appealed HMRC's refusal of group relief for the year to 31 Dec 1994 on the basis that Article 24(5) of the 1975 US‑UK Double Taxation Treaty prohibits discrimination where a UK resident company is directly owned by a US resident parent. The Tribunal held that the statutory denial of group relief depended solely on the parent being US‑resident and thus amounted to prohibited discrimination under Article 24(5). The appeal was allowed (except for a 10‑day period in December 1995 when no group relationship existed) and the decision was applied as a lead to related appeals.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Where domestic group relief entitlement turns on the residence of the immediate corporate shareholder, a treaty non‑discrimination provision like Article 24(5) can require the domestic law to treat a UK resident subsidiary whose immediate parent is resident in the treaty partner (here, the US) the same as if the parent were UK‑resident; if no other statutory ground explains the different treatment, denial of relief is discrimination under the treaty.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal noted foreign supreme court decisions (Netherlands, Finland, Sweden) interpreting identical or similar treaty provisions in favour of allowing domestic grouping relief for subsidiaries of a treaty‑partner parent, and observed that later OECD Commentary may inform interpretation but its weight should be approached with caution.