The UK Supreme Court on 19 February 2014 issued its judgment relating to three remaining issues in the Marks & Spencer case—i.e., the case addressing a cross-border group relief claims. The Court found that the conditions for the “no possibilities test” (NPT) must be satisfied at the time the actual claim is made.
Under the “no possibilities” test cross-border loss relief is permitted provided that the non-UK subsidiary has exhausted possibilities of using the losses in its state of residence and there is no possibility of the losses being used in future periods in that state of residence. This test was previously set out in a decision of the European Court of Justice.
The Supreme Court upheld the decision of the Court of Appeal and determined that as matter of domestic law, there was no support for the position that only one claim could be made for the same losses and the same period. Therefore, successive or cumulative claims could be made by the taxpayer as long as they were not already time barred under the existing domestic rules. The taxpayer, thus, was entitled to advance all claims made for periods under the corporation tax self assessment (CTSA) regime.
