In Icebreaker 1 Llp v HMRC (UT – 26 January) a limited liability partnership was formed in February 2004 with the aim of conducting a trade of film distribution. On 5 April 2004 it admitted six new partners who contributed capital totalling £1 520 000 of which 70% (£1 064 000) had been funded by non-recourse loans advanced by a Scottish bank. The partnership submitted accounts for a one-day accounting period (5 April 2004) indicating that it had begun trading on that date had made payments equal to virtually its entire capital and resources and had made a very substantial trading loss (£1 491 816) that its members could set against their other income. HMRC began an enquiry and formed the opinion that a major element of the payments which the partnership had made ‘had nothing to do with its trade but simply generated guaranteed receipts...
