Merill Lynch is unlikely to pay corporation tax in the UK for decades, according to reports in the press, because the investment bank has channelled its £16bn of sub prime losses through its UK branch Merrill Lynch International.

According to the Financial Times Merrill revealed its tax management strategy in US regulatory filings.

Experts are said to have commented that Merrill must be able to demonstrate that Merrill in the UK was the owner of the securities that failed.

The FT calculates that at 2006 profit rates the UK subsidiary could escape paying corporation tax for up to 60 years.