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23 January 2025

BlueCrest Capital Management (UK) LLP v HMRC [2025] EWCA Civ 23

BlueCrest is the first case to consider the application of the salaried members legislation (sections 863A-G ITTOIA 2005). The Court considered the interpretation of Conditions A (disguised salary) and B (significant influence), and the application of those Conditions to members of an LLP carrying out investment management activities and providing back office services.

The Court upheld the decisions of the FTT and UT on the interpretation of Condition A, concluding that payments in question were disguised salary.

The Court overturned the decision of the FTT on the interpretation of Condition B, concluding that significance influence must derive from the statutory and contractual framework which governs the LLP (such as the LLP agreement), and must be exerted over the affairs of the partnership generally, viewed as a whole.   Whether the test is met in this case will be remitted to the FTT for further consideration.

Richard Vallat KC and Laura Poots appeared for HMRC, together with James Kirby of Ten Old Square.

A copy of the judgment can be found here.

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