Carried interest base cost shift: In N Millican v HMRC [2024] UKFTT 618 (TC) (5 July) the FTT upheld the taxpayer’s appeal that his disposal of an interest in a company did not fall within the special regime in the TCGA 1992 which applies to ‘carried interests’. The FTT held that the condition in TCGA 1992 s 103KA(1) did not apply to the relevant arrangements because the appellant did not perform investment management services for an ‘investment scheme’.
This is a significant decision on the CGT rules introduced in 2015 to prevent a CGT advantage (known colloquially as a ‘base cost shift’) from accruing to individuals involved in investment partnerships. This is an esoteric area of the tax system but fortunately the FTT set out very clearly at the beginning of its decision how the base cost shift arises and how the legislation intended to block it operates.
The facts here...
