Disposals of LLP interests were taxable as miscellaneous income.
In The Boston Consulting Group UK LLP and others v HMRC [2024] UKFTT 84 (TC) (23 January 2024) the First-tier Tribunal (FTT) found that payments made to individual members of a UK LLP on ‘sales’ of their ‘capital interests’ were taxable as income under the miscellaneous category in ITTOIA 2005 s 687.
The appellants were individual partners in a management consulting firm which conducted business in the UK through a UK LPP together with that LLP. The main issue in this case was the correct tax treatment of payments received by those individuals on the disposal of certain interests they held in the LLP called ‘capital interests’. Capital interests were allocated to partners in the firm and their value increased or decreased based on the group’s global performance. Pursuant to the limited partnership agreement an individual...
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Disposals of LLP interests were taxable as miscellaneous income.
In The Boston Consulting Group UK LLP and others v HMRC [2024] UKFTT 84 (TC) (23 January 2024) the First-tier Tribunal (FTT) found that payments made to individual members of a UK LLP on ‘sales’ of their ‘capital interests’ were taxable as income under the miscellaneous category in ITTOIA 2005 s 687.
The appellants were individual partners in a management consulting firm which conducted business in the UK through a UK LPP together with that LLP. The main issue in this case was the correct tax treatment of payments received by those individuals on the disposal of certain interests they held in the LLP called ‘capital interests’. Capital interests were allocated to partners in the firm and their value increased or decreased based on the group’s global performance. Pursuant to the limited partnership agreement an individual...
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