Wednesday, 13 March 2019

UK: administrators must deduct income tax when paying rule 14.23(7) interest

The Supreme Court gave judgment today in Revenue and Customs v Joint Administrators of Lehman Brothers International (Europe) [2019] UKSC 12 (on appeal from [2017] EWCA Civ 2124): see here or here (pdf). A summary of the decision is available here (pdf).

The court unanimously held that interest payable under rule 14.23(7) of the Insolvency Rules 2016 was "yearly interest" under section 874 of the Income Tax Act 2007. As such, the administrators were required to deduct income tax before paying the interest to the creditors.

No comments: