UT holds payments under LLP ‘capital interests’ were income and that the mixed member partnership rules and extended assessment time limits applied (Holden and others v HMRC)
Tax analysis: In Holden, the UT held that amounts paid to members of a professional LLP under arrangements described as ‘capital interests’ were not capital receipts. The UT further held that, for later years, the mixed member partnership rules (MMRs) applied to reallocate profits from the corporate member to individual members, overturning the contrary conclusion of the FTT. The UT also upheld HMRC’s procedural positions, including that the LLP had acted carelessly and had done so on behalf of individual members, allowing HMRC to raise late assessments.