UK: Amortization deductions on intangible assets held by partnership denied (Upper Tribunal decision)
Upper Tribunal decision concerning amortization deductions on intangible assets held by partnership
The Upper Tribunal held that corporate partners of a limited liability partnership (LLP) were not entitled to amortization deductions with respect to intangible assets that had been acquired by the LLP from the corporate partners because the LLP would not have been entitled to such deductions if it were a corporation under corporate income tax rules disallowing amortization deductions on assets acquired from related parties.
The case is: Muller UK and Ireland Group LLP v HMRC [2024] UKUT 273 (TCC)
Although the “deeming provisions” were silent as to whether those related-party rules apply in the context of determining a corporate partner’s share of LLP income or loss, the tribunal found that it was appropriate to apply the related-party rules under the facts of this case and that the amortization deductions must therefore be denied.
Read a September 2024 report prepared by the KPMG member firm in the United Kingdom