TC09613 - [2025] UKFTT 00989 (TC)

Mr Pink corroborated Mr Burley’s narrative and added that Mr Pink had also suggested that there was also the possibility of mitigating tax by attributing profits in the LLP to Mr Burley's wife, Sheryl Burley. He explained that Mr Pink subsequently drafted a brief minute on Mr Burley's behalf which he signed, giving effect to the transfer of his beneficial interest in the Partnerships to the LLP. Mr Pink also advised Mr McErlean on the disclosure of this assignment in the accounts of the LLP.

Mr Pink’s evidence corroborates that of Mr Burley and Mr McErlean

The hearing bundle contained a copy of an engagement letter between Mr Pink and the LLP dated 10 January 2011. The services to be performed included advising on and supervising the implementation of tax planning using the LLP “including the appropriate terms surrounding the recent admission of [CBL] as a member and will settle the appropriate LLP and asset transfer documentation in accordance with our advice”. This was said to involve advice in relation to the claiming of losses on properties owned by the LLP in the US and possibly elsewhere and “the inclusion of these properties in the LLP with corresponding credits to your capital account on which drawings may then be made”. The engagement would conclude with a review of the accounts for the 2010-year end.

The hearing bundle also contains an extract from a tax planning document, prepared by Mr Pink, dated June 2011. The note reflects the fact that, although Mr Pink was first approached in October 2010, it was not possible to agree his engagement until mid-January 2011. Since the advice related to the correct preparation of accounts and tax returns for the year 2009/2010 it was not possible to prepare a “full dress tax planning document” before the filing deadline of 31 January 2011. For that reason, the document did not contain detailed calculations or specific timings. It said that the relevant accounts and tax returns had already been completed and so the exact numbers were already known. The extract in the hearing bundle focussed on the allocation of film partnership income to the LLP. It referred to the “inevitable element of retrospection” in the allocation of film partnership income to the LLP with effect from 6 April 2009. It said that it would no doubt be open to HMRC to argue that this allocation should not be treated as having effect until the date of the minute. It took the view, however, that it would be correct to reflect the film income within the LLP from 6 April 2009 because this would reflect the agreement between the parties. If the intended retrospection were ignored in the accounts, they would not be true and fair.