The tribunal has ruled in favour of HMRC in the Icebreaker case, which has been widely reported in the national media.
In the case, Acornwood and others v HMRC, Judge Colin Bishopp said: ‘No serious and even moderately sophisticated investor, or one with a competent adviser,
genuinely seeking a profit, even one willing to engage in a high-risk venture, but unmindful of any possible tax advantage, would rationally have chosen an Icebreaker partnership.’
The scheme involved several music investment partnerships set up to shelter over £330m of tax by triggering losses on the acquisition and exploitation of intellectual property rights.The FTT found that the schemes did not work for many reasons.
The key point was that the expenses were of a capital nature and so no income loss had been created. The tribunal also did not accept that the investors were active partners in a business venture.
HMRC said: ‘We have put in place generous reliefs to support genuine business investment and our tax reliefs for the creative industries work well, enabling the UK’s world class film, television and video production companies to compete
on the global stage. But we will not tolerate abuse of the system by people trying to dodge their tax obligations.’
Martin Taylor, head of client relations at Rebus Group, said: ‘In light of recent First-tier Tribunal rulings and the proposed HMRC legislation, this ruling is yet another nail in the coffin for investors. The average investor in Icebreaker
invested £357,266 and there are a couple of high net worth individuals who invested many millions of pounds.’
The tribunal has ruled in favour of HMRC in the Icebreaker case, which has been widely reported in the national media.
In the case, Acornwood and others v HMRC, Judge Colin Bishopp said: ‘No serious and even moderately sophisticated investor, or one with a competent adviser,
genuinely seeking a profit, even one willing to engage in a high-risk venture, but unmindful of any possible tax advantage, would rationally have chosen an Icebreaker partnership.’
The scheme involved several music investment partnerships set up to shelter over £330m of tax by triggering losses on the acquisition and exploitation of intellectual property rights.The FTT found that the schemes did not work for many reasons.
The key point was that the expenses were of a capital nature and so no income loss had been created. The tribunal also did not accept that the investors were active partners in a business venture.
HMRC said: ‘We have put in place generous reliefs to support genuine business investment and our tax reliefs for the creative industries work well, enabling the UK’s world class film, television and video production companies to compete
on the global stage. But we will not tolerate abuse of the system by people trying to dodge their tax obligations.’
Martin Taylor, head of client relations at Rebus Group, said: ‘In light of recent First-tier Tribunal rulings and the proposed HMRC legislation, this ruling is yet another nail in the coffin for investors. The average investor in Icebreaker
invested £357,266 and there are a couple of high net worth individuals who invested many millions of pounds.’
