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GE Wins Legal Dispute with UK Tax Authorities on $1bn of Unpaid Taxes
April 16, 2021
General Electric won a crucial legal dispute with the UK tax authority for alleged fraudulent tax underpaying amounting $1bn. In 2018, HM Revenue & Customs requested the UK High Court to annul a 2005 tax agreement with GE on the basis that the company failed to disclose key information relevant to the deal. It sought over $1bn in 15 years worth of taxes plus fines and interest. Claims are usually subject to a limitation period of 6 years, but HMRC accused GE of “fraudulent misrepresentation”, making the limit inapplicable. The High Court agreed in July 2020 that HMRC could take GE to trial, but the Court of Appeal of England & Wales ruled in favor of GE and overturned the decision. It ruled that fraudulent misrepresentation is in fact subject to the six-year limitation period. The fraud claim against GE over the 2005 deal could therefore not be pursued, and the contract remains binding. HMRC has not confirmed if the case would be taken to the UK Supreme Court.
General Electric´s USD bonds were slightly up. Its 6.75% 2032s up .53 to 136.126, yielding 2.87% and its 4.1% 2049s up .25 to 90.25, yielding 10.68%.
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