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Muller UK and Ireland LLP v HMRC

This is a case which has a number of interesting features. The narrow point concerns the treatment of an LLP whose members were companies within a large group. Where a partnership has one or more corporate members (as was the case here) its profits are to be computed as if the LLP’s trade was carried on by a company. The LLP had acquired goodwill and other intangibles from the companies and amortised the costs. Amortisation relief is not available where intangibles were acquired from a connected company. The LLP argued that this prohibition did not apply here. It said that the deeming provision only extended to the calculation of profits and did not require any assumptions to be made about its ownership structure. There the rules relating to related party acquisitions could not apply to the LLP and amortisation relief was not prohibited.

The FTT had found against the taxpayer