Generally Accepted Accounting Principles are the rules and practices required to be followed in keeping financial records and books of account.
/ Beneficial owner, Cargill, Conversion of receivables into shares, Disclosure of Tax Avoidance Schemes, Fairly represent, GAAP, General Anti-Avoidance Rules (GAAR), Goldman Sachs, Jersey, Tax Avoidance Schemes
Following the collapse of Enron in 2001, Goldman Sachs and Cargill had purchased a company previously known as Teeside Power Ltd. Teesside Power had claimed hundreds of millions of pounds were owed to the plant by other Enron subsidiaries. In a scheem devised by Ernst and Young, Teesside Power set up a Jersey-based company to avoid paying corporation tax on about £200 million by converting the receivables into shares. The Court of Appeal ruled in favour of the tax authorities and considered the scheme abusive tax avoidance covered by UK GAARs. The Court stated that statutory notes, although they are not endorsed by Parliament, are admissible as an aid to construction. The explanatory notes relating to the 2006 amendment to FA 1996 s 85A(1) confirmed that the amendment aimed to make it absolutely clear that the ‘fairly represent’ rule in s 84(1) takes priority over the accounting treatment mandated by s 85A(1). ”GDF EWCA Civ 2075 (05 October 2018)”] ... Continue to full case