UK Court Affirms Mining Company Used Loan to Secure Tax Break

A mining equipment company’s appeal for tax deductions on a $550 million intra-group loan was rejected after a UK appeals court concluded it was used to gain a tax advantage.

The UK Court of Appeal on Thursday affirmed rulings made by two lower courts that found JTI Acquisitions Company’s loan with its US parent company was done with an unallowable purpose.

The unallowable purpose rules apply when a company becomes party to a loan relationship where one of its main purposes is to secure a tax advantage.

JTI accounted interest debits worth just over £40 million ($51 million) and looked ...