M&S's victory on tax relief fails to open floodgates for UK companies.

Position:COMPANY LAW
 
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The European Court of Justice's recent ruling in favour of Marks and Spencer in its tax relief case has had a mixed reaction from the business community. The court has decided that a British company can claim UK tax relief on losses incurred by an overseas subsidiary, but only where all possibilities for the losses to be claimed against profits in the subsidiary's country have been exhausted.

The result is not a complete victory for M&S, according to Anton Hume, international tax partner at Grant Thornton, and other companies wishing to pursue similar claims may be in for a long wait.

"This is actually a reasonable outcome for the UK Treasury," he said. "The ruling will apply in limited circumstances and further questions will need to be referred to the court before the full position becomes clear. This could take another few years."

But Ross Wilkinson, director of corporate tax at the Chiltern tax consultancy, was more sanguine.

"While some firms may be...

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