27th Nov 2008 11:30
High Court Judgment in FII Group Litigation Order
In the High Court of Justice, The Honourable Mr Justice Henderson today handed down his judgment in the case of The Test Claimants in the FII Group Litigation versus The Commissioners for Her Majesty's Revenue and Customs (HMRC). The British American Tobacco group is the principal test claimant in this litigation.
The judgment is complex and extends to 150 pages. British American Tobacco will be studying the judgment in detail with external counsel and deciding on the future course of action.
This judgment applies the decision of the European Court of Justice (ECJ) in December 2006. The judgment concludes, among many other things, that dividends received from EU subsidiaries should be, and should have been, exempt from UK taxation. It also concludes that certain dividends received before 5 April 1999 from the EU and, in some limited circumstances after 1993 from outside the EU, should have been treated as franked investment income with the consequence that advance corporation tax need not have been paid. Claims for the repayment of UK tax incurred where the dividends were from the EU can be made back to 1973.
The judgment concerns issues of principle and the quantification of the claim is to be the subject of a subsequent hearing. The tentative conclusion reached in the judgment would produce recovery of about £1.2 billion for British American Tobacco but is subject to a further reference to the ECJ.
British American Tobacco cannot comment on what the views or reaction of HMRC is to this judgment, however the issues to be resolved in this case are so important to business and HMRC that the judgment may well be subject to appeal to the Court of Appeal and / or reference to the ECJ and this could take 3 to 4 years to resolve.
ENQUIRIES
British American Tobacco Press Office
David Betteridge / Kate Matrunola / Catherine Armstrong
+44 (0) 20 7845 2888
Investor Relations
Ralph Edmondson / Rachael Brierly
+44 (0) 20 7845 1180 / 1519
Name of duly authorised officer of issuer responsible for making notification:
G C W Cunnington
Deputy Secretary
020 7845 1925
27 November 2008
Related Shares:
British American Tobacco