Ardmore Construction v HMRC – deduction of UK income tax and source of loan interest

Xavier Nicholas and George Mitchell write for the International Law Office (ILO) on the Court of Appeal's decision in Ardmore Construction v HMRC.

The article considers the Court of Appeal’s confirmation that a multifactorial test is the correct approach for establishing the source of 'yearly' interest payable under a loan. The judge advised that the 'practical approach' must be adopted when weighing up the various factors and that the focus was on "substantive matters rather than theoretical factors".  Xavier and George summarise some of the considerations to bear in mind when applying the approved test in practice.

A pdf version of the article is available here or the article can be found here for ILO subscribers.