Bayonet Ventures LLP and R K Howard v HMRC

In Bayonet Ventures LLP and R K Howard v HMRC [2018] UKFTT 262 (11 May 2018) the FTT found that a loan to an LLP by a pension scheme in which one of the partners of the LLP was a member was not an unauthorised payment (FA 2004 s 164).

HMRC had opened an enquiry into Bayonet’s pension scheme tax return and concluded that it had made an unauthorised payment of £66 000 on the basis that a loan to an LLP of which one the partners was a member of the pension scheme should be treated as a loan to the partner (ITTOIA 2005 s 863).

The FTT accepted the taxpayers’ contention that s 863 only applies if the LLP is carrying on ‘a trade profession or business with a view to profit’ and that Bayonet was dormant at the relevant time. It...