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Syngenta Holdings v HMRC

This is another in the recent line of cases on the unallowable purpose test in the loan relationships regime. The transaction in question was a fairly straightforward intra-group reorganisation where the sale of one company to another group company was funded in part by debt. The question was whether the interest payable on that debt was deductible or whether it was incurred for an unallowable purpose, in which case no deduction would be available. The company incurring the interest obtained no tax benefit itself – the benefit was at group level because the interest deduction was offset against the liabilities of another group company.

The decision discloses a vast amount of documentation relating to the project,