The hearing before the Special Commissioners concluded on 27 th February. Although the case has limited remaining impact for other similar claims, the trial did tease out HMRC’s current reading of the ECJ’s decision of Dec ’05.  

According to HMRC the ECJ intended the availability of cross border group relief only to apply to losses incurred in jurisdictions which lacked any form of loss carry forward, contrary to the views of the Court of Appeal. If they are wrong on that point, HMRC then contend that, where unlimited carry forward is available, the “no possibilities” test could only be met upon dissolution of the loss making company.  

This may be of no help for periods prior to April 2006 (the introduction of the new rules) as a dissolved company does not exists and therefore, subject to local rules governing the powers of a liquidator after dissolution, may not be able to consent to the surrender of the losses. So on HMRC’s reading claims made prior to dissolution are too early, claims on dissolution or after it are too late. No additional insight was obtained into HMRC’s views on the computation of the losses for surrender.  

The Special Commissioners’ judgment is expected shortly.