Upper Tribunal's decision in Ingenious

Key points

• Investors were seeking to claim loss relief on investments in films and games.
• HMRC challenges whether the partnerships were carrying on a trade.
• The Upper Tribunal overruled the lower one and held that a trade was not being carried on.
• Partnership members will not be able to claim sideways loss relief.
• The partnerships rather than members could become liable to tax on income without corresponding deductions.
• Ultimately the decision in these cases will help set the boundaries of acceptable tax advantaged investments.

The latest but surely not the last stage in the long-running saga of the tax treatment of the Ingenious film partnerships has seen the publication of the Upper Tribunal’s judgment in the cross appeals from the First-tier Tribunal decision. The substantial case report will augment what is already a huge body of material. By my reckoning the judgments to date total some 580 pages and follow 71 days of hearings. The...