BCM Cayman LP and another v HMRC

In BCM Cayman LP and another v HMRC [2022] UKUT 198 (TCC) (BCM Cayman) and HMRC v BlueCrest Capital Management LP and others and A Dodd and others v HMRC  [2022] UKUT 200 (22 July 2022) the Upper Tribunal (UT) considered interrelated appeals by HMRC and taxpayers relating to profit allocations in respect of a complex multi-level partnership structure and a partnership incentivisation plan (PIP) the deductibility of finance costs for acquiring partnerships interests and the taxation in the hands of the partners of ‘special capital’ awards made under the PIP.  

BlueCrest Capital Management LP (BCM LP) was a limited partnership undertaking a trade of investment management. A number of limited partners with 19% of the total equity wished to sell their partnership interests. In order to facilitate this transaction a complex structure was established in the Cayman Islands pursuant to which a Cayman Islands company...