Wednesday 17 – Thursday 18 May 2023
This is a second appeal. By appellant’s notice filed on 26 April 2022, the appellant tax payer appeals the Upper Tribunal Decision dated 17 February 2022, whereby they dismissed their appeal against the decision of the First-tier Tribunal.
The appeal concerned the liability of the Appellant (Royal Bank of Canada or “RBC”), a publicly owned bank incorporated and tax resident in Canada, to UK corporation tax on certain payments received by it in its accounting periods ended 31 October 2008-2015 inclusive. RBC, acting through its head office in Canada, lent monies to a Canadian oil company, Sulpetro Ltd (“Sulpetro”), which, together with its UK subsidiary, had originally exploited oil from the Buchan Field. Sulpetro subsequently went into receivership, leaving an outstanding amount owed to RBC. By virtue of asset disposals entered in to by Sulpetro, with the UK resident and unrelated third-party, BP Petroleum Development Ltd (“BP”), Sulpetro was entitled to certain contractual payments from BP. In due course the right to those contractual payments passed from Sulpetro to RBC as creditor under the original loan made by RBC. On receipt of the Payments by RBC from BP, the Respondents, HMRC, contended that RBC was taxable in the UK as the recipient of income from “immovable property” in the UK. The FTT dismissed the applicant’s appeal against HMRC’s assessments and closure notices.