The High Court hearing in the Thin Cap Group Litigation concluded on 30 January. A further hearing to determine whether any breach of community law was sufficiently serious (a condition for those claims which are classified as damages claims) has been adjourned to enable HMRC to comply with an order that they disclose the legal advice they received on the compatibility of the 1995 changes with community law. The judge has indicated that he is likely to deliver judgment on the primary issue of whether or not the provisions offend community law in advance of that further hearing.
Also on 30 January appeals in the FII Group Litigation were lodged with the Court of Appeal. The hearing is expected late this year. Any further reference to the ECJ is now a matter for the Court of Appeal.
As a result of the favourable FII judgment we are seeking to bring forward determination of the portfolio dividend claims in the CFC and Dividend Group Litigation, currently not to be heard until November.
Further consideration of the UK’s CFC provisions is now to await determination first of the preliminary legal question in Vodafone 2 – i.e. should the CFC provisions just be disapplied wholesale or only where the CFC is sufficiently established? That case reaches the Court of Appeal stage in April. If successful further consideration of what is or is not a sufficient level of establishment to be excluded from the legitimate ambit of CFC charges will be unnecessary. Otherwise further litigation will no doubt be needed. Clarity will be at least a couple more years in coming.