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HMRC have refused a claim to the annual investment allowance by a limited liability partnership because the partners were an individual and another LLP
A business trades as a limited liability partnership (LLP1). The members of LLP1 are a UK resident and domiciled individual and another limited liability partnership (LLP2).
The members of LLP2 are also all UK resident and domiciled individuals. LLP1 has claimed an annual investment allowance (AIA) in the 2011/12 tax return.
However HMRC have opened an enquiry and are insisting that the AIA is not available because LLP1 is a mixed partnership by virtue of LLP2 being a member of it. Consequently LLP1 does not meet the definition of a “qualifying person” in CAA 2001 s 38A(3)(b).
However ITTOIA 2005 s 863(1) states that for income tax purposes “all the activities of the limited liability partnership are treated as carried on in partnership by its members (and not by the limited liability partnership as such).”
Our argument is that s 38A(3)(b) clearly...
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