Chris Bates and Judy Harrison review the impact of the decision in Samarkand, in which the First-tier Tribunal decided that a film leasing partnership which entered into a sale and leaseback was not trading. The view of the Tribunal on when expenses are deductible for tax purposes potentially affects all UK corporate taxpayers.
HMRC has successfully argued before the First-Tier Tribunal in Samarkand Film Partnership No.3 [2011] UKFTT 610 (TC) that a film leasing partnership is not trading.
It is perhaps slightly surprising that HMRC has raised the question of whether the partnerships in Samarkand were trading since the tax relief for films was introduced with the aim of encouraging just such investment in films (this relief has since been abolished).
This case may be...
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