The Commissioners for HMRC v GCH Corporation Limited & Ors

As we have mentioned above, the Trusts applied for permission to appeal the FTT Decision on the procedural issues in the Respondents’ Notice.

Mr Marre’s starting point, however, was that neither the Respondents’ challenge to the FTT conclusion that the LLP was not trading nor the Trusts’ challenge to the procedural issue required permission to appeal. The application that had been made in the Respondents’ Notice in relation to the Trusts’ appeals on the procedural issue was made out of an abundance of caution.

Ms Black did not contest Mr Marre’s submission in relation to the trading issue. So the only questions before us in relation to permission were whether the Trusts required permission to appeal in relation to the procedural issue and, if so, whether permission should be granted.

Section 11 of the Tribunal, Courts and Enforcement Act 2007 (“TCEA”) sets out the right of any party to appeal from the FTT to the Upper Tribunal (“UT”). It provides, so far as relevant, as follows:

The ability of either party to appeal the decision of the FTT to the UT can only be exercised with the permission of either the FTT or the UT following an application by the relevant party.

Rule 24 of the Tribunal Procedure (Upper Tribunal) Rules 2008 (“UTR”) governs responses by a respondent to a notice of appeal. It provides, once again so far as relevant, as follows:

As can be seen from the above extract, UTR rule 24 sets out requirements for the contents of a any response to a notice of appeal made by the respondent. It includes, in rule 24(3)(e), requirements for the respondent to identify the grounds on which the respondent relies. These include: any grounds on which the respondent wishes the UT to uphold the decision of the FTT for reasons other than those given by the FTT; and any grounds on which the respondent was unsuccessful before the FTT which are the subject of the appeal. In addition, under UTR rule 24(1C), the respondent must include in the response an application for permission to appeal in respect of any grounds for which it requires permission.

Before us, Mr Marre submitted that the Trusts only required permission to appeal from a “decision” of the FTT. Permission was not required where a respondent to an appeal was seeking to uphold the decision of the FTT, but on different grounds to those that had been relied upon by the FTT, but which had been advanced at the hearing before the FTT (see Price v HMRC [2015] UKUT 164 (TCC) (“Price”) at [35]).

In his submission, the arguments in relation to the procedural issue fell into the category of unsuccessful arguments rejected by the FTT, which achieved the same result as the FTT’s decision. The proceedings before the FTT concerned several appeals brought by several different taxpayers. The question was what was the result of each appeal? The result of each appeal was that each appeal was allowed in full. That was the “decision” of the FTT. The Trusts’ arguments in relation to the procedural issue, if determined in the Trusts’ favour, would only lead to the same decision i.e. that each individual Trust’s appeal was allowed in full and no tax was due. It was only out of undue caution that an application for permission to appeal was made in the Respondents’ Notice.

Ms Black submitted that permission to appeal was required in relation to the procedural issue. The question was not limited to the end result that tax was not due. The “decision” of the FTT also included the mechanism by which that result was achieved. The “decision” that was made by the FTT was that no liability to tax arose because the conditions in section 59A(1) TCGA were fulfilled. The decision on the procedural issue was a separate matter on which the FTT reached a separate (obiter) decision that the Trust Discovery Assessments were valid and that the conditions in section 29 TMA were met.

At the hearing, the parties conducted their arguments primarily by reference to the judgment of Rose LJ in HMRC v SSE Generation Limited [2021] EWCA Civ 105 (“SSE”), to which we refer below. We asked the parties to provide further case law authorities after the hearing and to identify relevant passages in the decisions in those cases which illustrate the application of the principles in Rose LJ’s judgment. In their subsequent submissions, all parties referred us to the decision of the UT in HBOS & Lloyds Banking Group Plc v HMRC [2022] UKUT 139 (TCC) (“HBOS”). Mr Marre, for the Respondents, also referred us to the decision of the UT in Fanning v HMRC [2022] UKUT 21 (TCC) (“Fanning UT”), for which, on this point, the Court of Appeal refused permission to appeal (see Fanning v HMRC [2023] EWCA Civ 263 at [22]). Ms Black, for HMRC, also referred us to the decision in Murphy v HMRC [2025] UKUT 165 (TCC) (“Murphy”).

As we have mentioned above, the parties referred us to the judgment of Rose LJ (as she then was) in SSE. That case concerned the availability of capital allowances on the construction of a hydro-electric power plant. The FTT allowed the taxpayer company’s appeal against the disallowance by HMRC of some items of expenditure, but upheld HMRC’s assessment in relation to others. In particular, the FTT found that certain types of expenditure incurred on the fabrication on site of certain “cut and cover” conduits did not qualify for allowances. HMRC appealed to the UT, which decided that the allowances were available in full, accepting the argument of the company, which had been rejected by the FTT, that the expenditure in relation to the “cut and cover” conduits should not be excluded.

On HMRC’s appeal to the Court of Appeal, the Court of Appeal agreed with HMRC that the company required permission to appeal to the UT in relation to the question of whether the fabrication expenditure for the “cut and cover” conduits qualified for allowances, which it did not have.

Rose LJ said this at SSE [77]:

She continued at SSE [80]

The decision of the Court of Appeal in SSE concerned the application of a version of the UTRs that required permission to appeal to be sought, in the first instance, from the FTT. That version of the UTRs did not permit a respondent to an appeal to apply for permission to appeal in a respondent’s notice. Some of the decisions to which we were referred by the parties (Fanning UT and HBOS) concern the same version of the UTRs. The current version of the UTRs allows an application for permission to be made by a respondent in a respondent’s notice without permission first having been sought from the FTT and indeed, where permission is required, provides that the application must be included in that notice (UTR rule 24(1C)).However, the principles as to when permission is required remain the same.

As regards those principles, we draw the following from the judgment of Rose LJ in SSE and the decisions of the UT to which we have been referred.

In this case, section 31(1)(d) TMA gave the Trusts rights of appeal against the Trust Discovery Assessments. On notification of their appeals to the FTT, the FTT was obliged to “decide the matter in question” (section 49G(4) TMA), which was “the matter to which the appeal relates” (section 49I(1) TMA). The matter to which the appeal related, in each case, was the Trust Discovery Assessment. On that appeal, the FTT was required, if it decided that the relevant Trust was overcharged by the assessment, “to reduce the assessment accordingly”; and, if it decided that the Trust was undercharged by the assessment, “to increase the assessment accordingly” (section 50(6)-(8) TMA). The FTT’s “decision” was therefore as to the correctness or otherwise of the Trust Discovery Assessments.

The FTT’s conclusion of the matters before it is found at FTT [278]. The FTT said this:

In our view the FTT’s “decision” for the purposes of section 11 TCEA was that the Trusts (and the other Respondents) were overcharged by the assessments and “there is… no tax to assess”. That was the answer to the question before it. The reason that it reached that decision was that the conditions in section 59A(1) TCGA were satisfied. If the Trusts had succeeded on the procedural issue the “decision” would have been the same. In their Respondents’ Notice, the Trusts are not asking the UT to make a different decision. The Trusts are seeking to raise before us arguments on which they were unsuccessful before the FTT as part of their case that the FTT’s decision was correct. They were entitled to do so by way of the Respondents’ Notice and do not need permission to appeal.

In our view, that conclusion is not inconsistent with the authorities to which we have been referred.

On that basis, we shall turn to the procedural issue.

The Trusts’ case is that the discovery assessments were invalid because the conditions for the issue of the discovery assessments in section 29 TMA were not met. In summary, the Trusts say that the FTT erred in finding that, on the evidence before it, HMRC had discharged their burden of proof to show that a discovery had been made by an HMRC officer that a chargeable gain which ought to have been assessed to capital gains tax had not been assessed or that an assessment to tax was or had become insufficient.

The Trusts’ grounds of appeal also included an argument, in the alternative, that the FTT erred in not determining that the discovery assessments made by HMRC were invalid because any discovery that was made by HMRC had become stale and did not possess the element of newness required to form the basis of a discovery assessment within section 29 TMA.

In this latter respect, the Trusts relied on the decision of the Court of Appeal in HMRC v Tooth [2019] EWCA Civ 826 (“Tooth CA”). Mr Marre acknowledged that the Supreme Court in HMRC v Tooth [2021] UKSC 17 (“Tooth SC”) had found that there was no doctrine of staleness. The Supreme Court decision in Tooth SC on this point was obiter and technically not binding. However, the UT in Harrison v HMRC [2023] UKUT 000038 (TCC) decided that the UT should follow the reasoning of the Supreme Court. For that reason, Mr Marre did not advance this argument before us. However, he reserved the right to argue the point that the decision of the Court of Appeal in Tooth CA was to be preferred if this case progressed any further.

We have outlined the procedural history above, but, for present purposes, we need to expand upon our earlier description and provide more of the factual background to the issue of the Trust Discovery Assessments. In doing so, we refer to the facts as found by the FTT as well as some of the documentary evidence that was before the FTT to which we were taken by Mr Marre.

On 29 April 2013 the Trusts submitted “voluntary” tax returns for the tax year ending 5 April 2012 (FTT [138]). The tax returns were “voluntary” in the sense that they were not submitted in response to a notice from HMRC.

On 6 September 2013 HMRC gave notice of intention to enquire into the returns. At the completion of the enquiry, on 11 May 2017, HMRC issued the Trusts with closure notices under section 28A TMA. (FTT [139]-[140])

The closure notices were issued by an HMRC officer, Ms C S McVicar. In the closure notice issued to the Children’s Trust, Ms McVicar stated:

“…During the above period loan notes acquired as a result of the takeover of Pinafore Acquisitions PLC by Tompkins Acquisitions Ltd were transferred to GCH Active LLP as part of a disclosed avoidance scheme with the reference number 17420994. The disclosure was made to HMRC on 25 May 2011.

The trust is a member of GCH Active LLP. The trust transferred £1,725,698 loan notes to GCH Active LLP. Having reviewed all of the documents and information supplied in conjunction with the legislation, guidance and case law I find that GCH Active LLP was not carrying on a trade or business with a view to a profit between incorporation on 26 August 2010 and liquidation on 10 June 2011. As a consequence it did not meet the requirements of Section 59A TCGA 1992 which would have allowed the transfer of loan notes to be treated as a capital contributions by its members as opposed to a capital disposal by them.

As such the limited liability partnership is not regarded as transparent for tax purposes but instead opaque and thus chargeable to corporation tax. Consequently the transfer of the loan notes to the Limited Liability Partnership on 18 May 2011 represents a capital disposal for Capital Gains Tax purposes.”

The closure notices issued to the No.1 Trust and the No.3 Trust contained wording in identical terms with the exception of references to the nominal amount of the Loan Notes that were transferred by each Trust to the LLP.

The Trusts appealed against the closure notices to HMRC. HMRC sent their view of the matter letter to the Trusts and offered a statutory review, which the Trusts accepted. On 16 May 2018, the Trusts introduced a new ground of appeal. This ground was that the closure notices were invalid as voluntary tax returns could not be enquired into (following the decision of in Patel v HMRC [2018] UKFTT 185 (TC)). (FTT [141]-[143])

The internal HMRC documentation relating to the review process shows that the AAB (Anti-avoidance board) had approved the issue of the closure notices, but that the voluntary returns argument had not been considered. As part of the review process, TALA (the Tax Administration, Litigation and Advice department) advised that the closure notices should be cancelled.

On 21 May 2020, following the conclusion of the review process, the closure notices were cancelled (FTT [144]). The letters to the Trusts informing them of the conclusion of the review and the cancellation of the closure notices was sent by the HMRC officer conducting the review, Mr Jonathan Philip Martindale. In his letter, Mr Martindale stated:

“My conclusion does not prevent HMRC from issuing a discovery assessment to give effect to their conclusions in the absence of a valid return from the settlement. If it is deemed appropriate to issue a discovery assessment, this will carry its own appeal rights.”

On 3 July 2020 HMRC issued new assessments to tax under section 29 TMA (the Trust Discovery Assessments) to the Trusts for the tax year ended 5 April 2012. The Trust Discovery Assessments were issued by another HMRC officer, Ms Francesca Marks. In her covering letter to each of the Trusts, Ms Marks stated:

“Following the outcome of the independent review that was concluded on 21 May 2020 in which it was determined that the section 9A TMA70 open enquiry notice issued on 25 April 2014 was found to be invalid, the subsequent closure notice issued under section 28A TMA70 on 11 May 2017 has therefore been cancelled.

The decision contained in the closure notice was based on HMRC's view that GCH Active LLP was not carrying on a trade with a view to a profit which would have resulted in a chargeable gain arising at the point in which the loan notes were transferred from the trust to GCH Active LLP on 18 May 2011.”

Later in her letter, she continued:

“I am making the assessment because HMRC's view remains the same as stated in the previous closure notice which issued on 11 May 2017.”

The letter continued with paragraphs which were in the same terms as those contained in the closure notices issued by Ms McVicar on 11 May 2017 to which we have referred above.

The Trusts appealed against the Trust Discovery Assessments. Following a statutory review, the assessment issued to the Children’s Trust was confirmed and the assessments made on the No.1 and No.3 Trusts were varied to include capital gains arising on the transfer of the Loan Notes to the LLP.

On 25 May 2021 the Trusts notified their appeals against the Trust Discovery Assessments to the FTT.

The circumstances surrounding the issue of the Trust Discovery Assessments was addressed in the evidence from HMRC’s witnesses: Ms Francesca Marks, the HMRC officer responsible for dealing with matters relating to the Company, the LLP and the Trusts; and Mr Andrew Young, the officer responsible for “Wealthy and Midsize Business Compliance, Assets” at HMRC.

In her witness statement for the hearing before the FTT, Ms Marks stated:

“39.

On reviewing the facts of the cases, I noted the following salient points:

(GCH Active LLP Review Conclusion – Box 5 & Box 8.3)

• GCH Active LLP purchased and sold listed shares on only two days from its incorporation to liquidation

• GCH Active LLP purchased just five listed shareholdings during that time

• All the listed shareholdings were purchased on the same day

• Two of the shareholdings were sold in their entirety on the same day

• GCH Active LLP did not have its own bank account but instead Mr Hutchings made funds available to allow GCH Active LLP to buy the listed shares

40.

Considering these facts, I concluded that that GCH Active LLP was not carrying on a trade or business with a view to a profit for the following reasons: (GCH Active LLP Review Conclusion – Box 8.3)

• There was no repetition of purchases and sales

• The total number of purchases and sales made is very low

• There was no continuity of business activities

41.

I reviewed the above points along with relevant legislation section 59A TCGA92 and guidance from Statement of Practice D12. I concluded that section 59A TCGA92 did not apply because I considered that GCH Active LLP was not carrying on a trade or business with a view to a profit. Consequently, this resulted in a chargeable gain arising at the point in which the loan notes were transferred from the Trusts to GCH Active LLP which had not been assessed due to the previous enquiries being found to be invalid on conclusion of the respective independent reviews.”

In the FTT Decision, the FTT recorded the main points that it took from the evidence of Ms Marks and Mr Young at FTT [109]-[128]. They included the following:

On this point, the FTT noted that it was not necessary for it to reach a conclusion on the Procedural Ground given its conclusions on the Substantive Ground, but it set out its views as it had heard extensive evidence on the issue.

The FTT rejected Mr Marre’s submissions that the requirements of section 29 TMA were not met because Ms Marks, the officer with responsibility for issuing the Trust Discovery Assessments, did not reach her own conclusion as to the tax liability that she sought to assess, but had simply adopted HMRC’s internal view; and (ii) that the correspondence and other documentation was evidence of HMRC having formed that internal view, which view had then simply been followed by Ms Marks and her predecessor (FTT [273]-[275]).

The FTT concluded (at FTT [276]-[277]):

Before us, Mr Marre conceded that the Trust Discovery Assessments were issued in time. However, he submitted that the burden was on HMRC to plead and to prove that the conditions for the making of a discovery assessment had been met (Burgess v HMRC [2015] UKUT 578 (TCC)). It was therefore for HMRC to prove that a discovery had been made. Mr Marre argued that the FTT’s conclusion that HMRC had discharged that burden was “irrational” on the evidence that was before it. This argument was based on the principles set out by the House of Lords in Edwards v Bairstow [1956] AC 14 (per Lord Radcliffe at p36). Mr Marre acknowledged that there was a high bar to its success. However, he submitted that the evidence supported that conclusion on this appeal.

There were two central pillars to Mr Marre’s argument.

We reject those submissions. We have set out our reasons below.

As regards the first of these lines of argument, Mr Marre’s case was that the FTT had made an error of law on the basis of the principles set out by the House of Lords in Edwards v Bairstow. In order to fall within those principles, Mr Marre would have to show that the FTT’s finding – that Ms Marks made a discovery within section 29 TMA – was one that “no person acting judicially and properly instructed as to the relevant law could have come to” whether that be because the FTT’s conclusion was one which there is no evidence to support, or one with which the evidence is inconsistent, or one in which the true and only reasonable conclusion contradicts the FTT’s determination. In our view, in the present case, that assertion is untenable.

As a starting point, the documents to which we were taken by Mr Marre do not contradict the evidence of Ms Marks. At best, they offer grounds for a challenge to Ms Marks’s evidence at the hearing before the FTT that she had made a discovery in that they might be said to demonstrate that Ms Marks simply issued the Trust Discovery Assessments pursuant to the work done in relation to the closure notices by Ms McVicar, or during the statutory review by Mr Martindale. Ms Marks was cross-examined on her evidence before the FTT, but the cross-examination failed to undermine the evidence of Ms Marks. The FTT found her “to be a credible and reliable witness who was able to clearly explain both how she had arrived at her conclusions and why she did not see the need to amend the precise wording used by her predecessor to set out the technical position” (FTT [276]).

The question of whether Ms Marks’s evidence was credible or was undermined by the contemporaneous documents was clearly a matter for the FTT. The FTT heard all the relevant oral evidence and read the relevant documentary evidence. The present case could not be further away from Edwards v Bairstow. Plainly, there was ample evidence to support the finding of the FTT that Ms Marks made a discovery; notably the evidence of Ms Marks, supported by the evidence of Mr Young. It is not possible to say that the only reasonable conclusion open to the FTT was that HMRC had failed to prove that Ms Marks made a relevant discovery.

As we have mentioned above, Mr Marre argued that the FTT should have preferred the evidence of the relevant documents to the evidence of Ms Marks. In this respect, Mr Marre referred us to remarks made by Leggatt J (as he then was) in Gestmin concerning the limitations of oral evidence in commercial disputes (at Gestmin [15]-[22]). The passage is well-known and we will not recite it here.

We do not, however, accept that the remarks of Leggatt J in Gestmin provide any basis to question the approach of the FTT to the evidence in this case.

Mr Marre’s second strand of argument was that any discovery that had been made by Ms Marks was not of a kind that fell within section 29 TMA. We questioned whether this submission was a separate challenge to the FTT Decision on the procedural issue on the grounds that the FTT had made an error of law in its interpretation of section 29 TMA. But Mr Marre insisted that this argument formed part of his wider assertion that the FTT had reached a conclusion that was irrational on the evidence before it.

Mr Marre’s argument was that a discovery assessment cannot be made under section 29 TMA in circumstances where the discovery relates not to an amount of tax that was not included in a closure notice but to a procedural or technical problem with a closure notice itself. As we have mentioned, Mr Marre referred us to the wording of section 29(1) which refers, so far as relevant, to cases where HMRC discover “chargeable gains which ought to have been assessed to capital gains tax have not been assessed” (paragraph (a)) or that “an assessment to tax is or has become insufficient” (paragraph (b)). He also referred us to passages from the joint judgment of Lord Briggs and Lord Sales in Tooth SC and to a passage from the judgment of Viscount Simonds in Cenlon in support of his argument.

The relevant passage from the joint judgment of Lord Briggs and Lord Sales in Tooth SC is at Tooth SC [73]:

That passage is referring to the judgment of Viscount Simonds in Cenlon (at p794) where he said:

Mr Marre sought to persuade us that the references in these passages to tax being “undercharged” support his assertion that section 29(1) is limited to cases where HMRC discover tax that has not been assessed and does not extend to cases where HMRC discover that there has been a technical error in the process of assessment by HMRC.

We are not persuaded that these extracts support Mr Marre’s submissions. In our view, the references in Viscount Simonds’s judgment in Cenlon (to which Lord Briggs and Lord Sales refer in Tooth SC) to tax being “undercharged” are not intended to place any such limitation on the scope of section 29(1). Indeed, Viscount Simonds’s statement that the wording of the section is “apt to include any case in which for any reason it newly appears that the taxpayer has been undercharged” (our emphasis) supports a broader interpretation. We acknowledge that the precise wording of section 29(1) and its predecessors have changed materially over time – indeed the wording of the section that was in force at times relevant to this appeal has since been amended – but we see nothing in the wording of section 29(1) or the judgments in Cenlon or Tooth SC which lends support to Mr Marre’s submission. In our view, even if, in the present case, the only new fact which presented itself to Ms Marks was the fact that the 2017 closure notices had turned out to be invalid, that was sufficient to constitute a discovery for the purposes of section 29(1).

All the analysis above assumes, however, that the only discovery made by Ms Marks was that there was a technical problem with the issue of the closure notices in 2017. That was not the evidence that she gave. Ms Marks’s evidence was that she conducted an analysis of the entire tax position. She did not simply note that the earlier closure notices issued to the Trusts in 2017 had been cancelled. She carried out an analysis of the relevant transactions carried out by the LLP. This resulted in her conclusion that the LLP had not been carrying on a trade or business with a view to a profit, with the consequence that a chargeable gain accrued to each of the Trusts on the transfer of the Loan Notes. Ms Marks then went on to note that those chargeable gains had not been assessed to tax by reason of the cancellation of the earlier, procedurally defective, closure notices. The entirety of this analysis was the basis of her decision to issue the Trust Discovery Assessments. The FTT accepted that evidence.

The Trusts can only succeed on this ground if they can establish that the only reasonable conclusion open to the FTT on the evidence before it was that Ms Marks, contrary to her own evidence, made no discovery of any kind, but simply adopted the discovery of another officer within HMRC. The Trusts attempted to establish this case at the hearing before the FTT and failed. Given the clear terms of Ms Marks’ evidence, that failure was not surprising. Nor was it surprising that the FTT accepted the evidence of Ms Marks. The question of whether to accept Ms Marks’s evidence was a question for the FTT. We can find nothing in its approach to that question that discloses an error of law or anything approaching an error of law. The reality is that the Trusts are attempting to re-litigate, in this tribunal, their failed challenge to the credibility of Ms Marks’s evidence. They should not be permitted to do so.

We dismiss this ground of appeal.

We therefore turn to the substantive issues. We will address first HMRC’s Grounds of Appeal before addressing the cross-appeal by the Respondents on the trading issue.

By Ground 1, HMRC say that the FTT erred in law in its interpretation of the meaning of “business” in section 59A(1).

We will begin by reviewing, in a little more detail, the FTT’s approach to the interpretation of section 59A(1) and its application of its conclusions to the facts of this case. This summary is relevant to both Ground 1 and Ground 2.

For HMRC, Ms Black's principal argument was that the FTT failed properly to apply the accepted principles of statutory construction in reaching its view on the meaning of “business” for the purposes of section 59A(1). As a result, the FTT adopted an impermissibly wide definition of “business”. She submitted that it was clear that Parliament intended to align the tax treatment of LLPs with those of general partnerships only if and when the LLP was operating a business in a similar manner to a partnership.

Under this heading, Ms Black raised various specific criticisms of the FTT’s approach:

Ms Black also argued that the FTT failed to give adequate reasons for its conclusion that the LLP was carrying on a business at the time of the transfer of the Loan Notes to it.

For the Respondents, Mr Marre supported the FTT Decision on the business issue. He submitted that:

We will address each of Ms Black’s criticisms in turn. However, we should say at the outset that we can find no material error of law in the FTT’s approach.

On the issues of statutory construction, Ms Black spent some time setting out the correct approach to statutory construction in support of her argument. She referred us to the summary of the principles of statutory construction in the judgment of Miles LJ in Watts v HMRC [2025] EWCA Civ 1615 (“Watts”) (at Watts [37-39]), which reflected the judgments of the Supreme Court in Rossendale Borough Council v Hurstwood Properties (A) Ltd [2022] AC 690, [2021] UKSC 16 (“Rossendale”) (Rossendale [9]-[17]).

There was no material dispute between the parties over the principles that must be applied. There is no need for us to repeat them here. They require a purposive construction of the statute – taking into account its context and where necessary, the history of its introduction and objectives – and its application to the facts viewed realistically.

There can be little doubt that the FTT was aware of these principles. The FTT set out its approach to the Ramsay principle at FTT [246]-[250].

Ms Black argued that the FTT declined to apply the Ramsay principle, and thereby failed to ask itself what she submitted was the crucial question: would Parliament have intended the treatment of the LLP as a partnership by section 59A(1) to apply to an LLP, whose only real world function was to receive the Loan Notes just before a planned liquidation, not to fund any trading or business, but to engineer the hoped for tax effect of a tax mitigation scheme?

In our view, it is clear, on a fair reading of FTT [246]-[250], that the FTT did not decline to apply the Ramsay principle. To the contrary, the FTT sought to apply the Ramsay principle. In these paragraphs, by reference to the arguments put to it, the FTT identified, correctly, the questions to be answered in relation to the substantive issues before it and accepted the need for a purposive construction of section 59A, in line with the Ramsay principle (FTT [248]).

Ms Black placed particular emphasis on FTT [250] in support of her case that the FTT declined to apply Ramsay. She submitted that the concept of “sham” plays no part in the application of the Ramsay principle and the reference to that concept in this paragraph demonstrates that the FTT declined to apply the Ramsay principle or failed to apply it correctly.

We disagree with Ms Black’s reading of FTT [250]. In FTT [250], the FTT is simply making the point that section 59A(1) is clear in its terms. It was not that the Ramsay principle did not apply to the construction of section 59A(1).

Although the FTT may perhaps have expressed itself differently, given that the test in section 59A is a simple one, we think the FTT’s observations can be justified. In considering the transactions carried out by the LLP, and in considering whether the LLP was carrying on a business, the test of business was not one to which further requirements could be added. The FTT was not considering a complex chain of transactions where, on a realistic view, particular steps in the chain could be seen to have no purpose other than tax avoidance – such as that considered by the House of Lords in Inland Revenue Commissioners v Scottish Provident Institution [2004] UKHL 52 [2005] 1 All ER 325. The question which the FTT was seeking to answer in this case – whether the transactions carried out by the LLP amounted to a “business” within section 59A(1) – concerned the tax status of the LLP as a whole. It was not focused on or limited to the transactions involving the Loan Notes, which gave rise to the potential tax advantage. The answer to Ms Black’s question (at [118]), which she accused the FTT of failing to determine, had to be determined by reference not only to the transactions in the Loan Notes, but after considering all the transactions undertaken by the LLP.

The reference to “sham” in FTT [250] was a reference to the fact that there is no dispute in this case about the transactions undertaken by the LLP. The FTT was not seeking to imply that the Ramsay principle was confined to cases involving sham transactions. It was simply saying that this case was not one where it was being alleged that any of the relevant transactions were sham transactions. So, in considering whether the transactions undertaken by the LLP amounted to the carrying on of a business by the LLP, the case was not one where HMRC were saying, or were able to say, that any of those transactions were not what they purported to be. The transactions undertaken by the LLP had to be considered as they were.

Ms Black also criticizes the FTT for failing to give full effect to the statutory context as part of its construction of the meaning of section 59A(1). She says that, if the FTT had fully appreciated the statutory context, it would have recognized that Parliament’s intention in enacting section 59A(1) was that an LLP should be treated as a partnership for tax purposes only when it is behaving as a partnership.

Once again, we can find no material error in the FTT’s approach.

The FTT was clearly aware of the importance of the statutory context. It refers to context at the beginning of its analysis (FTT [203]) and repeatedly throughout its review of the case law. Having conducted its review, the FTT sets out its approach at FTT [227], reminding itself of the importance of the statutory context.

The FTT considered the purpose of section 59A(1) at FTT [228]-[231]. It referred expressly to the passages from the Explanatory Notes to the LLPA upon which Ms Black relied in support of her submissions that the purpose of the provision is to determine the circumstances in which the tax treatment of LLPs should be aligned with that of general partnerships. The FTT identifies the same purpose (FTT [228]).

Ms Black also referred us to certain provisions of the Partnership Act 1890 (“PA 1890”). These included: section 1(1) PA 1890 which defines a partnership as “the relation which subsists between persons carrying on business in common with a view to profit”; and section 45 PA 1890 which contains the definition of “business” to which we have referred above. She argued that, given the purpose of section 59A(1) and the similarity of the wording, the circumstances in which an LLP should be treated as “transparent” by the provisions of section 59A should be limited to the circumstances in which a general partnership would be regarded as in “business” for the purposes of PA 1890.

We agree. However, it is clear that the FTT was cognisant of this point. The FTT expressly refers to section 45 PA 1890 and notes its relevance (FTT [234]) as part of its assessment of the statutory context and in particular the relevance of the inclusion of the term “trade” in section 59A(1). It says this at FTT [232]-[245])

Ms Black also takes issue with the FTT's analysis of the decisions in Rashid and Elisabeth Moyne Ramsay in the above passage.

Rashid was a case before the Special Commissioner concerning whether a taxpayer was a “self-employed earner” for the purposes of the Social Security Contributions and Benefits Act 1992 (“SSCBA”). In that case, the Special Commissioner decided that property letting transactions undertaken by the taxpayer were an investment and not a “business” for that purpose. Elisabeth Moyne Ramsay also concerned property letting, but in the context of the meaning of “business” for the purposes of “incorporation relief” in section 162 TCGA. In that case, the UT refused to adopt the same approach on the grounds that the statutory context was different. The UT found that the property letting activity conducted by the taxpayer could amount to a “business” for the purposes of section 162 TCGA.

As can be seen from the extract from the FTT Decision, the FTT declined to follow Rashid on the grounds that the UT in Elisabeth Moyne Ramsay decided that the meaning of “business” in Rashid was, in the words of the FTT, “not of general application” (FTT [244]). The FTT refers to a passage from the decision of the UT in Elizabeth Moyne Ramsay in support of this conclusion. The actual words used by the UT in Elisabeth Moyne Ramsay when referring to the meaning of “business” in Rashid are that it was “not appropriate to the analysis under s 162 TCGA” (Elisabeth Moyne Ramsay [57]).)

Ms Black says that the FTT was wrong to dismiss the decision in Rashid so peremptorily. She points out that, as can be seen from the extract from the FTT Decision above, the relevant provision in SSCBA - the definition of employment in section 122(1)) - refers to “employment” as including “any trade, business, profession, office or vocation”. Section 59A(1) contains similar language. The UT in Elisabeth Moyne Ramsay distinguished Rashid on the grounds that the meaning of “business” in the SSCBA “took its colour from an association, in the statutory definition, with trades, professions and vocations” whereas “business” in section 162 TCGA did not (Elisabeth Moyne Ramsay [57]). And yet the FTT relies on the decision in Elisabeth Moyne Ramsay as authority to distinguish Rashid in this case. Furthermore, the FTT then reverts to a broad definition of business similar to that adopted by the UT in Elisabeth Moyne Ramsay.

There is some merit in Ms Black’s argument. However, in our view, it does not undermine the correctness of the FTT’s conclusions based on the statutory context that “business” in section 59A(1) should be given its ordinary commercial meaning and should not exclude investment business (FTT [244]). Our reasons are as follows.

For these reasons, we agree with the conclusion of the FTT at FTT [244] (which is repeated at FTT [252]). We too would distinguish Rashid. The very different context and the statutory purpose of section 59A(1) dictate that “business” must have a broader meaning in section 59A(1) and is not constrained by the reference to “trade” which also appears in the section. As we have discussed above, we might not express our reasons in the same terms as the FTT, but that does not detract from the conclusions reached by the FTT nor its analysis of the statutory context and its implications for a purposive construction of section 59A(1).

Ms Black’s criticism of the FTT’s treatment of the decisions in Rashid and Elisabeth Moyne Ramsay were part of a wider submission regarding the FTT’s analysis of the case law on the meaning of business. Ms Black submitted that the FTT relied “wholeheartedly on cases referring to companies and the meaning of business for a company without acknowledging the difference in context”.

As we have noted above, the FTT prefaced its review of the case law by noting: that there is no statutory definition of “business” for the purposes of section 59A(1); that its meaning had to be determined by reference to the case law; and that it was clear from the case law that account had to be taken of the statutory context. It then began a review of the case law, which was derived from the case law that had been examined by the UT in GEFI UT. (The decision of the UT in GEFI UT has since been the subject of an appeal to the Court of Appeal (see GE Financial Investments v HMRC [2025] EWCA Civ 797 (“GEFI CA”). The Court of Appeal in GEFI CA allowed the appeal on other grounds, but the Court of Appeal decision does not cast any doubt on the analysis of this issue by the UT in GEFI UT.) There were no other authorities referred to the FTT by counsel. There was no suggestion before us that the FTT failed to take into account any relevant authorities.

We have summarized the FTT’s approach to the case law at [109(3)] above. It is found in the FTT Decision at FTT [206]-[226]. We will not set it out in full. It is sufficient to note that the FTT’s analysis is organized by reference to statutory context and infused with references to statutory context. At the completion of its case law analysis, the FTT directs itself to re-examine the principles that it has derived from the case law against the particular purpose and statutory context of section 59A(1) (FTT [227]). We therefore find it difficult to fault the FTT’s approach to the case law. The FTT was evidently aware of the context in which the cases to which it referred were decided and took that context into account.

As regards the particular criticism that the FTT relied principally on cases referring to companies, as we understood it, there were two aspects to Ms Black’s submission. The first was a more general point regarding the FTT’s approach to the meaning of “business” in section 59A(1) as a whole. The second was a more specific point concerning references in the FTT Decision to the principle – derived from cases such as Korean Syndicate and Westleigh Estates – that a company established for a particular business should, prima facie, be regarded as carrying on a business to the extent that it is carrying on activities in pursuance of that purpose. We address that more specific point later in this decision. As regards the more general point, we reject it. In our view, it is clear that the FTT had the context of the various authorities well in mind throughout the decision. The FTT addressed the case law that had been referred to it by the parties. There was no suggestion that the FTT failed to take into account any case law, equivalent to the company cases, dealing with the question of whether a general partnership or LLP was carrying on a business. Nor was there any suggestion at the hearing before us that there was other relevant case law that was critical to the analysis.

Ms Black also submits that the FTT had failed to give adequate reasons for its conclusions on the meaning of business in section 59A(1).

The relevant principles, when considering the adequacy of reasons, are set out in the judgment of Lord Phillips MR (as he then was) in English v Emery Reimbold [2002] EWCA Civ 605 [2002] (“Emery Reimbold”). He said this (at Emery Reimbold [26]):

We should also refer to comments of Popplewell LJ in DPP Law v Greenberg [2021] IRLR 1016 (“Greenberg”), where he explained what is required in terms of reasons in decisions (at Greenberg [57]):

Ms Black’s focus was on the paragraphs in the FTT Decision, at FTT [244]-[245], to which we have referred at [129] above. She submitted that FTT [245] was a conclusion without reasons. She referred us, by way of example, to the decision of the UT in Mark Glenn Ltd v Revenue and Customs Commissioners [2026] UKUT 34 (TCC) (“Mark Glenn”), which was relied upon by Ms Black as a case illustrating the distinction between the conclusion of a tribunal and the reasons given for that conclusion by the tribunal.

We disagree. As noted at FTT [238], HMRC had submitted to the FTT that “business” should be given a narrow meaning in section 59A(1) requiring a degree of activity that would exclude “passively held investments”. In support of this submission, Mr Dixon, for HMRC, sought to rely upon Rashid and Elisabeth Moyne Ramsay. As we have discussed, the FTT did not accept that argument for the reasons it gave at FTT [239]-[244]. Those reasons are shortly stated, but clear, and are based on the analysis of the statutory context, which begins at FTT [228]. The conclusion, which follows from the reasons given by the FTT and its analysis, is that “business”, in section 59A(1), should not be read as excluding investment business; see the second sentence of FTT [244]. This is not a case that comes anywhere close to the facts of Mark Glenn. To adapt the language of Lord Phillips MR (in Emery Reimbold) and Popplewell LJ (in Greenberg), it is apparent from the FTT Decision why the FTT reached the decision that it did; HMRC know why they lost.

At FTT [245], the FTT is primarily affirming the conclusion that it reached in FTT [244], which it repeats at FTT [252]. The FTT, we assume relying on its own experience that partnerships and LLPs are widely used as investment vehicles, comments that it would therefore be surprising if Parliament had legislated in a way that would distinguish between the tax treatment of partnerships and LLPs in relation to investment activity. In the context of the discussion which had preceded this comment (including the analysis of the statutory context), the comment makes sense. We accept that the reference to holding investments “on a non-active basis” brings into question the degree of activity required to amount to a “business”. It is clear from the authorities to which the FTT refers earlier in the FTT Decision that, in most contexts, “business” requires some degree of activity (see, for example, American Leaf per Lord Diplock at p684D). We address the question of the degree of activity later in this decision. However, we think that the comment must be read in the light of the conclusion in FTT [244]. We do not regard it as part of the essential reasoning of the FTT for reasons to which we shall return later in this decision.

For the reasons that we have given, we reject HMRC’s various criticisms of the FTT’s approach to the interpretation of the meaning of “business” in section 59A(1). Looking at this part of the FTT Decision as a whole, it seems to us that the FTT conducted a careful and holistic analysis and reached the correct conclusion (at FTT [244] and [252]).

We dismiss this ground of appeal.

By Ground 2, HMRC say that the FTT erred in its application of “business” to the specific facts of this case in concluding that the LLP carried on a business.

We have set out our summary of relevant parts of the FTT Decision at [109(9)] and [109(10)] above.

In relation to this ground of appeal, Ms Black, for HMRC, submits that the FTT erred in its application of “business” to the specific facts of the present case, which, in turn, caused the FTT incorrectly to conclude that the LLP was carrying on a business within the meaning of section 59A(1). Her main arguments were, in summary, as follows:

Mr Marre, for Respondents, once again supports the FTT Decision. In summary, he submits:

On this issue, we should begin by stating our conclusion.

This question, as HMRC concedes, was an evaluative one for the FTT to decide. It is well established that an appellate court or tribunal should act with caution in such cases. This tribunal should not intervene with such a conclusion unless it is irrational or plainly wrong in law (Fage UK Limited & Another v Chobani UK Limited [2014] EWCA Civ 5 per Lewison LJ at [114], AH & Others (Sudan) v Secretary of State for the Home Department [2007] UKHL 49 per Baroness Hale at [30]). It is not relevant that the appellate court or tribunal may or may not have reached a different conclusion on the facts as it understands them. In the present case, the decision of the FTT was not irrational or plainly wrong in law. It was entitled to conclude as it did.

We will address each of Ms Black’s submissions in turn.

We can deal with this submission very briefly.

We have set out above extracts from the judgments of Lord Phillips MR in Emery Reimbold and Popplewell LJ in Greenberg. Those extracts set out the requirements of decisions in terms of providing adequate reasoning.

In this context, Ms Black submits that the FTT erred in this respect. Ms Black’s submissions focus on FTT [262]-[263] which we have set out above. She submits that there is nothing in these paragraphs which references the specific transactions entered into by the LLP, their frequency or other identifying features which links them to the conclusion (in FTT [262]) that the LLP is carrying on the business. For example, there is no cross-reference to the factors in Lord Fisher which the FTT identifies at FTT [222] or to how those factors are met on the facts of this case.

We acknowledge that the passage in the FTT’s Decision which precedes these concluding paragraphs (in particular FTT [251]-[261]) does not refer back to the underlying findings of fact. It deals primarily with the application of the “presumption” that a corporate entity established to carry on business activities may be presumed to be carrying on a business if it undertakes those activities and the level of activity required of an investment business. However, these paragraphs cannot be divorced from the extensive findings of fact made by the FTT earlier in the FTT Decision (see for example, the summary of the findings in relation to the witness evidence of Mr Hutchings and Ms Hutchings at FTT [108]). Those findings when combined with the reasoning set out at FTT [262]-[263] can leave HMRC in no doubt as to why it lost this case. In short, the FTT decided that the LLP was carrying on a business because (i) it was formed and established in order to carry on a business, (ii) it undertook the transactions set out in the findings of fact in pursuance of that purpose, (iii) Mr Hutchings was engaged in a certain level of activity to support those transactions and (iv) the LLP’s participation in a tax mitigation scheme should not disturb that conclusion. The FTT decided that that was a sufficient level of activity to amount to a business for the purposes of section 59A(1). HMRC may disagree with that conclusion. However, the reasons why the FTT reached those conclusions are clear.

Ms Black’s principal argument on this ground is that the FTT adopted the wrong approach. She says that, rather than evaluating all of the possible factors to determine whether or not the LLP was carrying on a business, the FTT started from a presumption that an LLP, as a corporate entity, that was established for a particular business purpose and which conducts activities in pursuit of that purpose, must be regarded as carrying on a business (see FTT [263]).

The background to this point is found in the FTT Decision at FTT [253]-[256]. At FTT [253], the FTT says this:

The FTT then refers to the judgment of Lord Sterndale in Korean Syndicate (at p272) and Pollock MR’s judgment in Westleigh Estates (at p409) as authority for this principle. The FTT then concludes at FTT [256] in the following terms:

Ms Black says that this is a “flawed premise”. There is no such rule. She refers to the comments, albeit obiter, of Falk LJ in GEFI CA. In that case, which concerned the application of provisions of the UK/US double taxation treaty, Falk LJ, in a judgment with which both Whipple LJ and Arnold LJ agreed, said this (at GEFI CA [140]) in relation to the commentary provided by Lord Diplock in American Leaf on the judgment of Pollock MR in Westleigh Estates:

As can be seen from this passage, Falk LJ refers to a rule that a company carrying out an activity which is pursuant to the principal object of the company in its memorandum must be regarded as carrying on a business. There is clearly no such rule: it begs the question as to what the relevant object is and what activity is actually carried on by the company. Lord Dipock in American Leaf (at p683G) states that it is “far too broad a proposition”. However, in any event, that is not what the FTT says at FTT [256]. What it says is that a corporate entity (including an LLP) “established for a particular business purpose, should prima facie be regarded as carrying on a business to the extent that it is carrying on activities in pursuance of that purpose”.

Ms Black criticises that approach. She says that it created a presumption that the LLP was carrying on a “business” which had to be rebutted. The effect was to distort the conduct of the evaluation exercise that was involved in determining whether the LLP was carrying on a business. She points to the conclusion at FTT [262] and the summary of the reasons for that conclusion in FTT [263] and notes the absence of reference to other factors which may have been relevant given the FTT’s analysis of the case law earlier in the FTT Decision.

In our view, the FTT Decision does not betray a distortion of the evaluative exercise. The FTT regards the facts that the LLP was established to carry on the business of dealing in public company shares and that it undertook several transactions which are consistent with that purpose as “relevant” (FTT [253]). We do not understand Ms Black to dispute that they were relevant factors for the FTT to take into account. The FTT then refers (at FTT [256]) to the LLP being “prima facie” regarded as carrying on business as a result. But, it is simply part of the weighing of the factors. Those facts are reflected in FTT [263(1)]-[263(2)]. However, they are not the only factors that the FTT refers to having taken into account (see FTT [263(3)]-[263(4)]).

Furthermore, the FTT made extensive findings of fact in the FTT Decision. The conclusions and reasons at FTT [262]-[263] are stated briefly. In the absence of an indication to the contrary, we must assume that it has taken its findings from the evidence into account. In this respect, we return to our initial comments on this ground. This was an evaluative decision for the FTT. It is not open to this tribunal to disturb that conclusion unless we are satisfied that the FTT’s conclusion is irrational or wrong in law. We are not so convinced. We also bear in mind that where a tribunal has identified the correct legal principles, an appellate court or tribunal should be equally cautious to conclude that the FTT has not correctly applied them (see Popplewell LJ in Greenberg at [48]). In this case, the FTT identified the correct principles and, in our view, adopted the correct interpretation of the meaning of “business” in section 59A(1). In the absence of an indication that the FTT has failed to apply those principles, we should presume that the FTT has followed them.

In the context of Ground 2, Ms Black relied in particular on the decision of the Special Commissioner in Rashid as authority that “business” should not extend to passively held investments. For the reasons that we have given above, in our view, the FTT was right to distinguish Rashid in its discussion of the interpretation of the meaning of business in section 59A(1). As to the question as to whether passively held investments can be regarded as amounting to a business in any particular case, that is a matter for the FTT to decide as part of its consideration of the overall level of activity that is required to amount to a business within section 59A(1). However, we note that, in this case, the LLP’s business was not simply passive. The LLP did not make a profit simply by holding shares and receiving dividend income. It made its profit by buying and selling shares. In addition, the LLP – through Mr Hutchings – did some, albeit limited, research to identify and monitor investments. In our view, it was open to the FTT to reach the conclusion that it did that that level of activity combined with the other elements that the FTT identified, was sufficient degree of activity to amount to a business in this context.

For these reasons, we dismiss this ground of appeal.

By Ground 3, HMRC say that the FTT failed to provide any, or any adequate, reasons for concluding that the LLP was carrying on a business “with a view to profit”.

The FTT deals with this issue, the profit issue, in four short paragraphs at FTT [264]-[267]. We have set them out below.

Ms Black, for HMRC, says that the FTT’s conclusion on the profit issue (which is stated at FTT [267]) is inadequately reasoned. Furthermore, the FTT Decision could be read as implying that the profit issue was not challenged before the FTT, which she contended it was.

Mr Marre says that the profit issue was not argued as a separate and distinct issue before the FTT by HMRC. He says, in any event, the FTT’s reasoning meets the test set out by Lord Phillips MR in Emery Reimbold when seen in the context of the FTT Decision as a whole.

It is not necessary for us to seek to resolve the dispute between the parties as to whether the profit issue was argued before the FTT as a separate and distinct issue. The FTT was clearly seized of the issue and provided an answer to it.

We have set out, in the context of our discussion of the business issue, the requirements for decisions in terms of adequacy of reasons. They are found in the judgment of Lord Phillips MR in Emery Reimbold to which we refer at [141] above. In summary when an appellate court or tribunal is faced with a challenge on these grounds, it is instructed to review the judgment, in the context of the material evidence and submissions at the trial, and determine whether “when all of these are considered, it is apparent why the judge reached the decision that he did”.

In the present case, the FTT reached its conclusion that the LLP carried on a business “with a view to profit” at FTT [267]. The reasons for its conclusion, taking into account its previous findings of fact and analysis in the remainder of its decision, are stated at paragraphs [265] to [267].

These paragraphs therefore contain the FTT’s conclusions and the reasons for it, referring, where necessary, to its previous findings and conclusions which are necessary for dealing with the profit issue. Ms Black did not identify in her written or oral submissions, or when asked at the hearing to do so, any element of the reasoning or any necessary finding that was missing from the decision. There is none. With reference to the words of Lord Phillips MR in Emery Reimbold, it is apparent why the FTT reached the decision that it did. To adopt the words of Popplewell LJ in Greenberg, HMRC knew why they lost.

In this context we should also refer to the terms of the Practice Direction, issued by the Senior President of Tribunals on 4 June 2024 on reasons for decisions, which sets out basic and important principles for the giving of written reasons for decisions in the FTT. Paragraphs 6 and 7 state as follows:

In our view, FTT [264]-[267] comprise a commendably concise statement of the reasons for the conclusion of the FTT on the profit issue, of the kind contemplated by the Practice Direction.

We dismiss this ground of appeal.

We turn finally to the trading issue.

By this ground, the Respondents say that the FTT erred in law in finding that the LLP was not carrying on a trade at the time of the contribution of the Loan Notes to the LLP.

In summary, the FTT approached the trading issue in the following way:

Mr Marre does not criticise the FTT's identification of the relevant principles (at FTT [171]-[182]). However, he submits that the FTT erred in its application of those principles. In short, he says that the FTT applied the badges of trade mechanically and failed to step back and consider the facts holistically as it directed itself to do (at FTT [182]).

Mr Marre submits that, in doing so, the FTT failed to follow the approach of the House of Lords in Ensign Tankers (Leasing) Ltd v Stokes [1992] 1 AC 655 (“Ensign”) and the Court of Appeal in Ingenious and focus on what the LLP actually did. What it did was to expend capital in the purchase of shares for resale, put its capital assets at risk, and later turn a profit on selling the shares that it had purchased. That was, Mr Marre submits, clearly a trading activity. The LLP made a profit. This was not a case, as in Ingenious, where it was necessary to establish that the LLP was carrying on a trade for the members to benefit from a loss.

We will deal with this point briefly, not least, because, as Mr Marre acknowledged, the concept of trade is narrower than that of business. The business issue presents a much lower bar for the Respondents. It is difficult to see how this issue will affect the determination of this appeal unless we remit the appeal to the FTT (which given our conclusions on HMRC’s grounds of appeal, we will not).

In this case, as Mr Marre accepts, the FTT identified the correct principles of law and directed itself appropriately. In such a case, the case law authorities are clear: an appellate court or tribunal should be slow to conclude that, having identified the correct legal principles, the FTT failed to apply them faithfully. We referred earlier in this decision to the comments of Popplewell LJ in his judgment in Greenberg at Greenberg [58]. We set it out in full below.

In the present case, the correct principles were identified by the FTT, and the FTT can be expected to have applied them unless the contrary is clear from the language of the FTT's decision.

There is nothing in the FTT Decision to suggest that it did not apply those principles. Rather, the language of the FTT decision suggests that it did.

We will deal briefly with two specific criticisms made by Mr Marre.

Mr Marre suggested that the FTT paid only lip-service to its self-direction at FTT [182] to step back and look at the facts holistically. But that is not correct. Having considered the relevant factors identified by reference to the “badges of trade”, the FTT once again referred to the need to look at the facts holistically (FTT [198]-[199]). Its conclusion is expressed to be made by reference to its assessment of the LLP’s activities as a whole and the way in which they were implemented (FTT [200]).

Mr Marre also suggested that the FTT failed to take into account the judgment of Lord Templeman in Ensign. But the FTT conducted its analysis by reference to the Court of Appeal’s decision in Ingenious, to which the FTT referred as considering “some of the key authorities”. Ensign is referred to extensively in Ingenious. It is inconceivable that the FTT did not take it into account. In any event, there is nothing in the FTT Decision to suggest that it ignored the decision in Ensign. Indeed, the reasoning in the decision is consistent with the judgment of Lord Templeman in Ensign.

For these reasons, we conclude that, following the direction of Popplewell LJ in Greenberg, there is no good reason for this tribunal to disturb the findings of the FTT.

We dismiss the Respondents’ cross-appeal in relation to the trading issue.

For the reasons that we have given above: