Court of Appeal holds that discretionary payments to LLP members were taxable as miscellaneous income (HMRC v HFFX LLP)

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Tax analysis: In HMRC v HFFX LLP, the Court of Appeal considered appeals by both HMRC and the individual members of a limited liability partnership (LLP) relating to discretionary deferred profit allocation/reallocation incentivisation arrangements. The Court of Appeal held that the discretionary reallocated payments to individual members of the LLP were taxable as miscellaneous income.