ARTICLE · 05 MAY 2015

Upper Tribunal Decision In Samarkand And Proteus

Reed Smith (Worldwide)

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The long-awaited Upper Tribunal Decision in the Samarkand and Proteus case has been published.

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The long-awaited Upper Tribunal Decision in the Samarkand and Proteus case has been published. The case relates to statutory sale and leaseback partnerships with partners claiming losses under the film acquisition relief provisions in sections 130-144 of the Income Tax (Trading and Other Income) Act 2005 where HMRC had successfully argued in the First Tier Tribunal that the partnerships were not trading on a commercial basis with a view to profit. This Decision was appealed to the Upper Tribunal, together with an Application for Judicial Review. The basis for the Judicial Review was that the taxpayers had a legitimate expectation derived from HMRC's Business Income Manual (BIM), such that it was not open to HMRC to raise trading arguments because the sale and leasebacks were "plain vanilla" transactions within the safe harbour parameters described in the BIM. The Upper Tribunal found in favour of HMRC on both grounds.

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