Pension funds sub-underwrite by guaranteeing they will buy shares when companies have rights issues in return for a commission.
The court’s decision yesterday, which overturned a previous High Court decision, could save pension funds £200m a year.
The British Telecommunications and Post Office pension schemes argued that sub-underwriting was an integral part of their investing activities, and therefore exempt from tax.
Lawyers representing the Inland Revenue, however, had argued that sub-underwriting constituted a trade and commissions earned were therefore subject to tax.
The Court refused the Revenue leave to appeal, although it could petition the House of Lords over the issue.
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