LLP not trading, so tax deductions and R&D relief denied.
In LR R&D LLP v HMRC [2025] UKFTT 245 (TC) (28 February) the FTT decided that the LLP was not trading and on that basis dismissed its appeals against closure notices which disallowed partnership losses totalling £14 715 954.
HMRC argued that the LLP’s losses arose pursuant to an avoidance scheme in which the LLP was used to create losses which could then be claimed by the LLP’s members to set off against other income.
The context was that the LLP had acquired rights to exploit transdermal patch technology for the delivery of medications from NDM Technologies Ltd (NDM). The LLP entered into a framework agreement to sub-contract research and development (R&D) work related to that technology to NPL Sub-Contractor Ltd (NPL-Sub). It paid £8m to NPL-Sub for the R&D work 74% of which was...
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LLP not trading, so tax deductions and R&D relief denied.
In LR R&D LLP v HMRC [2025] UKFTT 245 (TC) (28 February) the FTT decided that the LLP was not trading and on that basis dismissed its appeals against closure notices which disallowed partnership losses totalling £14 715 954.
HMRC argued that the LLP’s losses arose pursuant to an avoidance scheme in which the LLP was used to create losses which could then be claimed by the LLP’s members to set off against other income.
The context was that the LLP had acquired rights to exploit transdermal patch technology for the delivery of medications from NDM Technologies Ltd (NDM). The LLP entered into a framework agreement to sub-contract research and development (R&D) work related to that technology to NPL Sub-Contractor Ltd (NPL-Sub). It paid £8m to NPL-Sub for the R&D work 74% of which was...
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