Agreement stands

Losses from film partnerships

The taxpayers were partners in several film partnerships. They claimed losses relief under F(No 2)A 1992 s 42. After an enquiry the partnerships and HMRC reached a compromise agreement that allowed reduced losses. HMRC wrote to the taxpayers to say their tax returns would be amended in line with the lower figures for the partnership losses.

The taxpayers applied for judicial review. They said their claims for relief by carrying back losses had not been made in their self-assessment tax returns under TMA 1970 s 8. Instead they were standalone claims that had not been made in tax returns and HMRC could challenge them only under TMA 1970 Sch 1A. HMRC did not open such an enquiry within the time limits so the partnership settlement agreement did not affect their claims. The Upper Tribunal and Court of Appeal rejected the application.

Lord...