CJEU – Recent Developments in Direct Taxation 2017
1. Aufl. 2018
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1. S. 216Trustees of the BT Pension Scheme v HMRC – C-628/15, judgment of
1.1. Introduction
The United Kingdom abolished the partial imputation system for corporate dividends with effect from 1999. Nevertheless, cases still continue to arise on the pre-1999 system. The judgment in the Trustees of the BT Pension Scheme case in September 2017 is a carry-over from one aspect of this system, the Foreign Income Dividend or “FID” Scheme.
Those who are familiar with the European Court’s case law on the UK’s partial imputation system will need no explanation of the background. The FID Scheme was one of the issues raised in the FII Group Litigation case. However, for those who may have forgotten the details, a brief reminder:
Under the imputation system as it was originally introduced, a UK-resident company had to pay Advanced Corporation Tax (“ACT”) when paying a dividend (subject to certain exceptions). This ACT served two purposes. First, it could be offset against the company’s own tax bill for the year (generally referred to as its mainstream corporation tax). Secondly, the shareholder who received the dividend and who was resident in the United Kingdom received a tax credit eq...