James Kirby appears for HMRC in HFFX LLP v HMRC
27th Mar 2023
The Upper Tribunal’s decision is the latest in a series of income tax appeals concerning corporate partner avoidance schemes, whereby LLPs in the financial sector paid profits to their members via a corporate partner, with a view to exploiting the difference between income tax and corporation tax rates. The appeals raise important issues about partnership law and income tax law. These include (i) the circumstances in which the court will imply a term into an LLP agreement that a discretion is to be exercised fairly and rationally, (ii) whether discretionary payments under such schemes are taxable as income and (iii) whether the partners in these firms were undertaking activities of a kind undertaken in a profession.
The Upper Tribunal refused the members’ appeals (and HMRC’s cross-appeal) against the decision of the First-tier Tribunal (HFFX LLP v HMRC  UKFTT 36 (TC)), in which James Kirby also acted as junior counsel.
James Kirby Call 2017