UK Appeals Court Rejects German Dairy Group’s Tax Deduction

A UK appeals court has denied corporation tax deductions sought by multinational dairy company Müller Group on transfers of intangible assets, deeming them related-party transactions.

The profits of a limited liability partnership should be computed by replicating the real-world circumstances of its trade, the Court of Appeal (Civil Division) held Wednesday, rejecting the group’s argument that calculation should be made as if a “notional” UK company had carried on the business independently.

In 2013, UK-resident corporate members of the German dairy group transferred their trades and assets—including brands, licenses, software and goodwill—to a limited liability partnership.

The group members claimed ...