In The Brain Disorders Research Limited Partnership v HMRC [2015] UKFTT 325 (2 July 2015) the FTT found that schemes designed to enhance capital allowances and interest relief did not work.
The schemes broadly worked as follows (using hypothetical simple numbers). The partnership paid 100 to a special purpose vehicle (SPV) to undertake research work. The 100 was verified by a third party as the amount required to undertake the research conventionally. The SPV then subcontracted the work to a company which held the technology expertise systems and databank to enable it to perform the work for a fraction of the price. The SPV therefore only paid 6 to its subcontractor. As the partnership had paid 100 to the SPV it hoped to claim capital allowances for 100. The scheme was then revised following changes in the legislation.
A clause of the...
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In The Brain Disorders Research Limited Partnership v HMRC [2015] UKFTT 325 (2 July 2015) the FTT found that schemes designed to enhance capital allowances and interest relief did not work.
The schemes broadly worked as follows (using hypothetical simple numbers). The partnership paid 100 to a special purpose vehicle (SPV) to undertake research work. The 100 was verified by a third party as the amount required to undertake the research conventionally. The SPV then subcontracted the work to a company which held the technology expertise systems and databank to enable it to perform the work for a fraction of the price. The SPV therefore only paid 6 to its subcontractor. As the partnership had paid 100 to the SPV it hoped to claim capital allowances for 100. The scheme was then revised following changes in the legislation.
A clause of the...
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