BlackRock has lost an appeal to reclaim UK taxes on its $13.5bn acquisition of Barclays Global Investors (BGI) in 2009.
It is the latest turn in the long-running dispute over the deal structure after the US giant used $4bn in loans from one of its US companies to acquire the US arm of BGI.
HM Revenue & Customs (HMRC) subsequently challenged the tax deductions related to these loan notes, citing issues with transfer pricing and the non-deductibility of certain expenses.
Although the tribunal initially ruled in favour of BlackRock on these points in 2020, HMRC appealed the decision which was subsequently overturned in 2022.
BlackRock escalated the matter to the Court of Appeal. However, after a three-day court session in March, the Court of Appeal upheld the decision, dismissing BlackRock's appeal.
A spokesperson from BlackRock said: “BlackRock has paid all of its UK Corporation tax, including the payment some time ago of all tax due in relation to this matter.
“The purpose of this hearing relates to the operation of a specific point of tax law. Following the Court of Appeal’s judgment, we are closely evaluating our next steps.”
BlackRock’s acquisition of BGI – along with its iShares business – was a landmark moment for asset manager and propelled it to become the dominant force in passive investing.
The issuer’s assets under management also more than doubled from $1.4trn to $3.3trn, making it the world’s largest money manager – a title it has retained to this day.
BlackRock has recently come under fire after the firm’s Larry Fink was set to face a vote on his dual role as chairman and CEO after a UK activist investor called for more oversight over the asset manager’s approach to sustainable investing.
