In Daarasp and Betex v HMRC [2018] UKFTT 548 (13 September 2018) the FTT found that two LLPs were not entitled to capital allowances under CAA 2001 s 45.
Daarasp and Betex were both LLPs which had purchased software licences and the issue was whether they were entitled to capital allowances. The FTT had to decide the following: whether the LLPs carried on a trade; and if so whether they had actually incurred the relevant expenditure (given the complex financing arrangements) whether the licences were long life assets (s 44(2)) and whether the anti-avoidance rules of s 215 applied.
The FTT found as a fact that during the relevant period exploitation of the software licence had been minimal as the LLPs did not have the necessary framework resources or know-how to support significant trading activities. There was also no oversight of the activities...
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