Supreme Court rules that the UK-Canada double tax treaty did not confer taxing rights on the UK in respect of oil royalty payments (Royal Bank of Canada (Respondent) v HMRC (Appellant))

Article summary

Tax analysis: The Supreme Court, by a majority, dismissed HMRC’s appeal, holding that payments received by Royal Bank of Canada (RBC) did not constitute income from immovable property for the purposes of Article 6 of the UK-Canada double tax treaty (DTT). This was because the payments were not ‘consideration for the working of, or the right to work’ the Buchan oil field. As such, the UK-Canada DTT did not confer on the UK a right to tax the payments. Lord Briggs, in his dissenting judgment, held that the payments did fall within Article 6(2). As well as outlining a summary of the decision, this News Analysis also contains commentary from Philip Baker, KC, Field Court Tax Chambers.