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Samarkand Film Partnership No 3 & others v CRC; R (on the application of Samarkand Film Partnership No 3) v CRC; R (on the application of Proteus Film Partnership No 1) v CRC, Upper Tribunal
The partners of two partnerships claimed they had incurred losses from the sale and leaseback of films under ITTOIA 2005 s 130 to s 144.
Were the claims to succeed the taxpayers could then request sideways relief under TA 1988 s 380 and s 381 to set the losses against other taxable income – but HMRC refused saying the partnerships were not trading.
The First-tier Tribunal (FTT) dismissed the partners’ appeals on the ground the transactions were not trading in nature.
The taxpayers appealed again saying there had been a trade which had been carried on a commercial basis.
They also sought judicial review claiming the Revenue’s decision to deny relief went against practice and the guidance in the Business Income Manual. The partners said the tax department’s conduct amounted to an abuse of power.
The Upper Tribunal (UT) said the FTT...
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