TC09613 - [2025] UKFTT 00989 (TC)

The hearing bundle contains a copy of a “Minute of Agreement”, which is undated but signed by Mr Burley and Mrs Burley and again by Mrs Burley as a “Director for and on behalf of Craig Burley Limited”. The text of the Minute is as follows:

“Minute of Agreement
It is agreed that:

1.

Craig Burley will hold the four properties in Florida USA, legally registered in his name, for the benefit of the LLP absolutely, with effect from 1 September 2009.

2.

This introduction will be equity capital of the LLP, and will be valued for the purposes of the LLP accounts at the cost of the properties, translated into Sterling at the rate applicable on 1 September 2009.

3.

Craig Burley Limited (the "Company") will be a member of the LLP from 1 September 2009.

4.

In the accounting period beginning 1 September 2009, the Company will bear an amount of any losses in respect of the Florida properties equivalent to any income allocated to it in the LLP from other sources.

5.

All capital profits of the LLP will accrue to Craig Burley.

6.

In succeeding periods following that referred to in 4 above, income profits and losses will be allocated according to a unanimous vote of the members following the accounting period end.

7.

Craig Burley will hold his rights to income from investment in film partnerships for the LLP absolutely with effect from 6 April 2009 in respect of all such partnerships held on that date.”

As we have just observed, the Minute was undated. It was clearly prepared by (or on the instructions of) Mr Pink. The document referred to at [24] indicates that Mr Pink’s firm was formally engaged on 13 January 2011 and this suggests that the Minute would have been executed before the 31 January 2011 tax filing deadline for the 2009/10 tax year. On that basis, we find that the Minute was executed no earlier than 13 January 2011 and no later than 31 January 2011.

We asked Mr Cannon about Mr Burley’s CGT analysis of these arrangements. Did Mr Burley dispose of an asset (his right to partnership income) on contribution or at any time subsequently (e.g. when the income was allocated to CBL)? Mr Cannon told us that under the LLP agreement Mr Burley would have been entitled to 100% of capital profits in respect of the assets he introduced to the LLP. Therefore, under the CGT regime applying to partnerships and LLP’s as set out in HMRC Statement of Practice D12 he was deemed for CGT purposes to own 100% of the asset after the introduction (although for all other purposes the LLP owned it). In consequence no disposal for CGT purposes was considered to have occurred.

The LLP accounts for the period 1 September 2009 to 28 February 2010 (which were approved by the members on 28 January 2011) show that CBL became a member on 1 September 2009.