In The Gala Film Partners LLP v HMRC [2023] UKFTT 699 (TC) (4 August 2023) the FTT disallowed almost £111m in partnership loss relief for 2003/04 on the basis that the business was not trading with a view to profit. Loss relief against other income of the individual partners was also denied as was loan interest relief for buying into the partnership.
The Gala Film Partners LLP (Gala) was set up to enable high-net-worth individuals to invest in the distribution of films produced by Sony. An investment of £10m by each partner was 75% funded by borrowing.
Gala’s trade involved distribution rights and incurred advertising ‘and other trading expenses’ making a significant tax loss in the first year. Gala members obtained tax repayments of £4m based on loss relief: more than their cash contributions.
The scheme included an option from...
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In The Gala Film Partners LLP v HMRC [2023] UKFTT 699 (TC) (4 August 2023) the FTT disallowed almost £111m in partnership loss relief for 2003/04 on the basis that the business was not trading with a view to profit. Loss relief against other income of the individual partners was also denied as was loan interest relief for buying into the partnership.
The Gala Film Partners LLP (Gala) was set up to enable high-net-worth individuals to invest in the distribution of films produced by Sony. An investment of £10m by each partner was 75% funded by borrowing.
Gala’s trade involved distribution rights and incurred advertising ‘and other trading expenses’ making a significant tax loss in the first year. Gala members obtained tax repayments of £4m based on loss relief: more than their cash contributions.
The scheme included an option from...
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