Ingenious Games LLP and others v HMRC

In Ingenious Games LLP and others v HMRC [2017] UKFTT 429 (17 May 2017) the FTT found that the impairment amounts (or onerous contract provisions) which related to the expenditure on the film rights were not allowable deductions as they were of a capital nature.

This was a supplemental decision to the one reported at [2016] UKFTT 521 and released on 2 August 2016. The remaining issue was whether the sums found to be deductible for GAAP purposes were not deductible in computing taxable profits under ITTOIA 2005 s 33 on the basis that they were of a capital nature.

HMRC argued that for GAAP purposes the rights under the relevant agreements were not current assets but fixed intangible assets held for use on a continuing basis in the business so that they were of a capital nature and no deductions could be...