17 July 2020

BlueCrest & Ors v HMRC; (FTT)

The first part of the case concerned deductible costs of finance for the buyout of a large part of a financial partnership.  The Tribunal found that neither the interest nor the capital costs of the borrowing could be deducted.  The second part of the case concerned an arrangement whereby sum which were expected to form partners’ deferred remuneration were allocated to a corporate partner (rather than to the relevant individual partner) and benefits were conferred on individual partners in later years.  The taxpayers argued that this was taxed on the corporate partner only with no further tax when benefits were conferred.  The Tribunal found that the allocation of partnership profit was made to the corporate partner rather than to the individuals, but that the individuals were liable to income tax on benefits received.

Rupert Baldry QC and Thomas Chacko represented HMRC.

To see the approved decision, click here.