Lehman Brothers International (Europe) (in administration) - UK Withholding Tax Judgment and Sealed Order - 14 October 2016

On 22 December 2015, the Joint Administrators of Lehman Brothers International (Europe) (in administration) (“LBIE”) issued an application to Court (the “Application”) for directions in relation to the application of withholding tax legislation to payments of statutory interest. Her Majesty’s Revenue and Customs (“HMRC”) was joined as the Respondent to the Application. 

On 11 October 2016, Mr Justice Hildyard handed down his judgment in respect of the Application, following the hearing which took place before him on 28 and 29 April 2016. A copy of the judgment and the sealed Order are available here and here. Mr Justice Hildyard has given permission to HMRC to appeal.

In summary, Hildyard J held that payments of statutory interest pursuant to Rule 2.88(7) of the Insolvency Rules 1986 do not give rise to any obligation on the part of a company in administration or on the part of the company’s administrators to deduct amounts representing income tax.

Should you have any queries regarding this update, please contact LBIE’s Communications and Counterparty Management team at generalqueries@lbia-eu.com