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Taking an interest in partnerships: examining the UK FTT’s decision in BCG v HMRC

The recent UK First-tier Tribunal (FTT) decision in The Boston Consulting Group UK LLP & Others v HMRC [2024] UKFTT 84 (BCG) concerned the tax treatment of certain ‘capital interests’ held by the individual members of a large LLP, conducting the UK business of a global management consultancy firm.

David Haworth (partner) and David Haughey (senior associate) from our London tax team acted for the appellants in this case and summarise key takeaways from the decision in the article at the link below.

The article explains that while there have been a number of recent cases concerning the UK tax treatment of partnership incentivisation arrangements, the FTT’s decision in this case may be viewed as an extension of the principles derived from those cases (in particular, on the scope of the charge to ‘miscellaneous income’), in the context of arrangements intended to give partners a long-term ‘equity’ interest in the business in which they operate.

The article also highlights that the case also provides much-needed further guidance on how future tax tribunals might apply the so-called ‘mixed member rules’.

This article was originally published in Tax Journal on 23 February 2024.

Taking an interest in partnerships - examining the UK FTTs decision in BCG v HMRC
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