The Resource Royal Bank of Canada v Revenue and Customs Commissioners : [2022] UKUT 45 (TCC)

Royal Bank of Canada v Revenue and Customs Commissioners : [2022] UKUT 45 (TCC)

Label
Royal Bank of Canada v Revenue and Customs Commissioners : [2022] UKUT 45 (TCC)
Title
Royal Bank of Canada v Revenue and Customs Commissioners : [2022] UKUT 45 (TCC)
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Contributor
Subject
Language
eng
Summary
Judgment by the Upper Tribunal (Tax and Chancery Chambera), decision date 17 February 2022. The Royal Bank of Canada (RBC) had, via its Canadian head office, advanced loans to Sulpetro Limited (Sulpetro), a Canadian company. The loan of CAD 540 million was extended in the early 1980s to help fund the exploitation by Sulpetro's group of companies of rights to drill for oil in the North Sea's Buchan oil field (the Rights). The Sulpetro group sold the Rights to the BP group in 1986. The consideration included an entitlement to contingent royalty payments based on production from the Buchan oil field (the Payments). The Payments are linked to the excess of the market price of the oil in question above a benchmark level. Sulpetro went into receivership in 1993; by then, oil prices had risen and some Payments had started to be made. Nevertheless, Sulpetro still owed RBC approximately CAD 185 million following the realization of its assets. Sulpetro's rights to all future Payments were formally assigned to RBC. Subsequently, BP sold the Rights to another UK company, Talisman Energy (UK) Limited (Talisman). Talisman accounted for the Payments made by it as a deduction from its ring-fence profits of its UK oil exploitation trade. RBC treated the Payments received by it as income of its banking business in Canada. RBC accounted for the Payments as a partial recovery of the bad debt it had previously recognized in respect of its loan to Sulpetro. The Payments were not reported in any UK tax return. This transaction did not involve RBC's permanent establishment in the United Kingdom, which it had at all times. The appeal covers the years from 2008 to 2015 and essentially involves three issues: (1) whether the UK - Canada double tax treaty allocates taxing rights to the UK in respect of the Payments; (2) if it does, whether the Payments fall within the scope of the UK taxing provisions; and (3) whether the assessments for the years to 31 October 2008-11 (totalling some £10 million) raised by HMRC were made out of time under the 'discovery' assessment provisions. The foundation of this argument mainly related back to certain correspondence involving Sulpetro, BP and HMRC in the period from 1986 to 1992. FTT considered the UK/Canada double tax treaty confers taxing rights on the UK in respect of the Payments, and dimissed the appeal. The Upper Tribunal has now upheld the decision of the First-tier Tribunal (reported at (2020) 22 ITLR 747)
Citation source
In: International tax law reports. - London. - Vol. 24 (2022), part 4 ; p. 529-602
http://bibfra.me/vocab/relation/comm
wgxhYUYtE4w
http://library.link/vocab/creatorName
Avery Jones, J.F
Geographic coverage
Europe
Language note
English
http://library.link/vocab/relatedWorkOrContributorName
Baker, P
http://library.link/vocab/subjectName
  • case law
  • tax treaty
  • mining industry
Label
Royal Bank of Canada v Revenue and Customs Commissioners : [2022] UKUT 45 (TCC)
Instantiates
Publication
Label
Royal Bank of Canada v Revenue and Customs Commissioners : [2022] UKUT 45 (TCC)
Publication

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