15 December 2023
BlueCrest Capital Management v HMRC [2023] EWCA Civ 1481
BlueCrest Capital Management, Dodd and ors v HMRC is currently the leading authority on the taxation of LLPs, the way partnership profits are allocated for tax purposes, and the miscellaneous income charge. You can find a copy of the judgment here.
This was extremely high value litigation concerning the remuneration arrangements for one of the world’s leading investment funds.
Rupert Baldry KC and Thomas Chacko (leading James Kirby of 10 Old Square, specialist partnership counsel) acted for HMRC against Jonathan Peacock KC, John Brinsmead-Stockham KC and Ed Hellier of 11 New Square.
Rupert and Thomas (who had successfully represented HMRC since the first hearing in 2019) showed that the arrangements used by BlueCrest, intended to allow part of each partner’s reward to be taxed on a corporate member, deferred for a period and then to be delivered to the individual partner without income tax consequences, did not work.
This case has significant implications for the taxation of partnerships generally and for deferred and indirect remuneration. It is particularly important because of the more complex LLP based structures that have been developed in finance over recent years.
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