In C Upham and others v HSBC UK Bank plc [2024] EWHC 849 (Comm) (26 April 2024) the High Court (HC) dismissed the claims of a number of investors in a failed tax scheme for compensation from the bank which devised the scheme.
The claimants were all investors in the Eclipse scheme which was intended to enable individuals to defer their tax liabilities by investing in LLPs associated with the film industry. In essence investors would borrow to fund capital contributions to an LLP and would then be able to set off the interest against other income. The scheme had been devised by an employee of HSBC (B) and was promoted by Future Films. It ultimately failed because the LLPs were held not to be trading (see Eclipse Film Partners (No 35) LLP v HMRC [2015] EWCA Civ 95).
The claimants sought to recover the losses they suffered as a...
