BlackRock Inc (NYSE:BLK) has lost an appeal in the UK to reclaim tax on the asset manager’s US$13.5 billion (£10.8 billion) takeover of Barclays Global Investors in 2009.
Following a years-long dispute, Britain’s Court of Appeal denied BlackRock’s efforts to reclaim funds from HM Revenue & Customs (HMRC) on Thursday.
This related to a structure that was put in place at the time, a UK tax resident company known as Blackrock Holdco 5 LLC.
Blackrock funded this through US$4 billion in loans, with HMRC having denied tax reductions on interest and other expenses relating to these.
“We welcome the Court of Appeal’s decision which confirms our position on the unallowable purpose rules that there should be no tax deductions for interest payments on intra-group loans in those circumstances,” an HMRC spokesperson commented.
“We take action against those who seek to avoid tax.”
Blackrock responded that it was “closely evaluating [...] next steps,” following the ruling.
“BlackRock has paid all of its UK corporation tax, including the payment some time ago of all tax due in relation to this matter,” a spokesperson said.
“The purpose of this hearing relates to the operation of a specific point of tax law.”