Eastern Power Networks PLC & Ors v The Commissioners for HMRC
Decision date: 10 June 2025
Neutral citation: [2025] UKFTT 703 (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
This case concerns consortium loss relief claimed by subsidiaries of UKPNH for 2011–2016 and HMRC's limitation of relief by applying s146B, which halves relief where arrangements form part of a scheme whose main purpose is a tax advantage. The Tribunal held that, for calculating "ownership proportion" where multiple link companies exist, the relevant provisions (ss165–167 and s144) must be applied to the link companies collectively to avoid double-counting, producing a lowest ownership proportion of 40% (HMRC's figure). The Tribunal also found that Article 7.5 formed part of a corporate-structure scheme whose one of the main purposes was to enable enhanced consortium relief, so s146B applied; the appeal was dismissed.
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 multiple link companies exist, ss165–167 and s144 should be construed so that the beneficial entitlements of the link companies are treated collectively for the purpose of calculating ownership proportions, avoiding double-counting and proportions exceeding 100%; a purposive construction that prevents absurd results is preferred. Also, arrangements forming part of a corporate-structure scheme can satisfy s146B if one of the scheme's main purposes was to obtain a tax advantage (here, enabling enhanced consortium relief).
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 observed that statutory wording using the singular ("a company") does not necessarily exclude plural application and that consolidation-style statutes are to be read as a coherent code; it also suggested that identification of a "scheme" for s146B may realistically encompass corporate-structure arrangements and need not be confined to narrowly tax-focused steps.