02 July 2015

FTT Decision: Brain Disorders Research Ltd Partnership & Hockin v HMRC

Income Tax – Claim for capital allowances in respect of expenditure on scientific research – Scheme to claim the allowances for a substantially higher amount than that actually applied in undertaking such research – whether the partnership’s whole activity or any part of its activity constituted trading for tax purposes – whether if so, trading losses derived from capital allowances arose in a non-commercial venture – whether pre-payments of interest on two substantial borrowings were allowable – whether the amounts borrowed had been contributed to a partnership and applied wholly for trading purposes – whether “interest” had actually been paid – whether relief was denied by section 787 Taxes Act 1988 – whether certain expenses were deductible – Both Appeals dismissed.
Kevin Prosser QC, David Yates & Zizhen Yang acted for HMRC.
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