Court of Appeal upholds UT and FTT decisions that incentivisation awards to partners are subject to income tax (HMRC v BlueCrest Capital Management LP and others and Andrew Dodd and others v HMRC)

Table of contents

• The Profit Allocation Issue
• Miscellaneous Income
• Why it matters
• Case details

Article summary

Tax analysis: In HMRC v BlueCrest Capital Management LP and others and Andrew Dodd and others v HMRC, the Court of Appeal considered the tax treatment of awards made to partners under an incentivisation plan. It upheld the decision of the First-tier Tax Tribunal and the Upper Tribunal (UT) that, although the awards did not constitute profit share allocations, they were nevertheless income and subject to income tax as miscellaneous income under section 687 of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005).