Tradition Financial Services Ltd v Bilta (UK) Ltd and others [2023] EWCA Civ 112
Key Takeaways:
On 22 July 2022, the English High Court sanctioned Houst Limited’s (“Houst” or the “Company”) restructuring plan (the “Restructuring Plan”), which significantly, is the first time a Restructuring Plan has been used to cram down HM Revenue & Customs (“HMRC”) as preferential creditor.1
Background
In Princeton Office Park, the U.S. Court of Appeals for the Third Circuit affirmed the bankruptcy and district court rulings that the purchaser of a NJ tax sale certificate forfeited its claim and lien because it included the premium it paid to the State when it purchased the tax certificate.
The powers available to HMRC to request information or documents from a third party (a Third Party Notice) where it is reasonably required by HMRC for checking the tax position of a taxpayer are generally well known. What is not so well known is the limited opportunities available to a third party who might wish to challenge the terms or scope of a Third Party Notice.
It is not uncommon for companies, often property related joint ventures or single purpose vehicles, to be incorporated abroad for tax reasons but carry on much of their business in Scotland or elsewhere in the U.K. This can result in difficulties when determining where to initiate insolvency proceedings.