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Bristol & West loses bid to avoid paying £30m corporation tax

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Bank of Ireland subsidiary Bristol & West has lost its bid to avoid paying around £30m in corporation tax on a £91m gain.

Bristol & West, which transferred its mortgage book to Bank of Ireland in October 2007, tried to exploit what it thought was a loophole in the tax rules.

The company thought that by transferring a swap contract to another Bank of Ireland subsidiary the £30m tax owed would disappear when the original contract was cancelled and replaced with a new one.

A tax tribunal has now upheld HM Revenue & Customs’ view that there is no loophole to exploit.

Treasury exchequer secretary David Gauke says: “The vast majority of businesses and individuals pay the tax they owe. The additional resources we have made available to HMRC are helping to ensure the minority cannot avoid their responsibilities.

“HMRC will challenge avoidance schemes that risk denying the exchequer vital tax revenues and will pursue to litigation when necessary.”

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