Chancery Division.

[The appeal against this decision is reported at [1998] BTC 422.]

Carnwath J.

Judgment delivered 24 July 1997.

Corporation tax – Loss relief – Failing property company ran down investments keeping a minimum to retain status as investment company – By a circular series of transactions taxpayer borrowed from its shareholder to pay interest accrued on loans from the shareholder – Whether taxpayer remained an ‘investment company’ – Whether interest was ‘paid’ – Income and Corporation Taxes Act 1988, s. 75, 130, 338(3)(a).

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