Bristol and West loses £30m corporation tax avoidance case

The former building society transferred a swap contract to another Bank of Ireland subsidiary in a flawed attempt to exploit what it thought was a loophole in the tax rules, HM Revenue & Customs (HMRC) said. The bank's theory was that the £30m tax would disappear on the cancellation of the original contract and its replacement with a new one. It entered into a swap transaction for commercial hedging reasons, but decided to transfer the swap to another Bank of Ireland subsidiary to exploit a perceived weakness in rules on the taxation of swaps in Finance Act 2002. The bank believed ...