Do related party rules apply?

A limited liability partnership (LLP) was formed by three companies in the Muller Group. Each company transferred its trade and intellectual property (including goodwill) to the LLP in return for membership units in the LLP. The LLP amortised the cost of the intellectual property in its accounts and sought a tax deduction for the amount amortised each year.

HMRC raised assessments on the basis that relief was not available as the goodwill etc had been acquired from a related party. 

The taxpayer argued that the related party rules did not bite in these situations. Although CTA 2009 s 1259 requires that the profits of an LLP in which there is at least one corporate member are to be treated as if they were the profits of a company and hence charged to corporation tax that section says nothing about the ownership of the LLP and doesn’t deem it...