Sale of LLP capital accounts not subject to income tax.
In C Hoyle and others v HMRC [2024] UKFTT 1060 (TC) (26 November) the First-tier Tribunal (FTT) held that the anti-avoidance provisions in the ITA 2007 Part 13 Chapter 5 did not apply to the disposal of the appellants’ capital accounts in LLPs engaged in leasing film rights. This was because following the judgment in Samarkand v HMRC [2017] EWCA Civ 77 as a matter of fact and law the LLPs were not trading for tax purposes.
The appellants took part in a film leasing scheme through LLPs that acquired and leased film distribution rights. They funded 80% of their capital contributions to the LLPs though bank loans. The LLPs (i) claimed film tax credits on the basis that they carried on a trade of exploiting film rights and (ii) allocated what was at the time...
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Sale of LLP capital accounts not subject to income tax.
In C Hoyle and others v HMRC [2024] UKFTT 1060 (TC) (26 November) the First-tier Tribunal (FTT) held that the anti-avoidance provisions in the ITA 2007 Part 13 Chapter 5 did not apply to the disposal of the appellants’ capital accounts in LLPs engaged in leasing film rights. This was because following the judgment in Samarkand v HMRC [2017] EWCA Civ 77 as a matter of fact and law the LLPs were not trading for tax purposes.
The appellants took part in a film leasing scheme through LLPs that acquired and leased film distribution rights. They funded 80% of their capital contributions to the LLPs though bank loans. The LLPs (i) claimed film tax credits on the basis that they carried on a trade of exploiting film rights and (ii) allocated what was at the time...
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