UK Court Denies Tax Relief on Guernsey Firm’s Imported Losses (1)

A UK court disallowed a Guernsey-based company’s claim for tax relief on a large portion of losses following its acquisition by a UK care home provider.

UK Care No. 1 Limited’s loan-related losses of £89.7 million ($121 million) constituted “imported losses” not eligible for UK corporation tax relief, the Upper Tribunal ruled in its Wednesday decision.

The tribunal did, however, partly allow the company’s appeal, overturning a lower court’s decision on certain elements of the losses and permitting corporation tax deductions of around £4 million relating to unamortized loan issue costs and discounts.

The dispute arose after UKC1 was acquired ...