Prudential has moved a step closer to securing a tax refund of over £100m from HM Revenue & Customs in a long-running battle over European tax law.
The Financial Times reports the Court of Appeal yesterday rejected almost all the arguments put forward by HMRC against an earlier ruling.
The legal challenge is part of multiple hearings in which companies are trying to recover tax paid decades ago.
Many UK tax rules at the time are said to have breached European law by treating cross-border transactions less favourably than those carried out in the UK.
The case has been running for 13 years, with several High Court hearings and a referral to the European Court of Justice. It is unclear whether HMRC will gain permission to bring an appeal to the Supreme Court.
Pru’s claims stretch from 1990 to 2007, when it received several thousand dividends. It argues by overpaying tax on foreign dividends, investments returns to both with-profits policyholders and shareholders were hit.
HMRC told the newspaper: “HMRC is extremely disappointed with this judgment. Nothing is payable immediately as a consequence of these decisions and we plan to robustly defend our position through future appeals.”
Pru declined to comment, but Graham Aaronson of Joseph Hage Aaronson, the litigators acting for the insurer, said: “It is obviously an encouraging result.”