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Investec Asset Finance Plc and another v HMRC

In Investec Asset Finance Plc and another v HMRC [2020] EWCA Civ 579 (29 April) the Court of Appeal considered a number of issues relating to the tax treatment of an investment structure involving a mixture of partnerships and companies.

The two appellant companies entered into a series of complex transactions under which they became partners in a number of leasing partnerships. They incurred costs in acquiring their interests in the partnerships and subsequently made further capital contributions to them. Shortly afterwards the partnerships sold off their assets receiving large sums of money which generated profits in their hands. Much of the money was then paid over to the appellants.

There were three issues for the court to consider. The first issue was whether the capital contributions were deductible in computing the taxable profits of the solo financial trades carried on by the appellants. The court agreed...

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