Burley v Revenue and Customs (INCOME TAX - purported assignment of interests in partnership profits - whether purported assignor remained entitled to those profits) [2025] UKFTT 989 (TC) (14 August 2025)

Burley v Revenue and Customs (INCOME TAX - purported assignment of interests in partnership profits - whether purported assignor remained entitled to those profits) [2025] UKFTT 989 (TC) (14 August 2025)

Even if the assignment of partnership profit interests by Mr Burley to the LLP was effective in equity, the commercial reality was that the profits continued to be applied for Mr Burley's benefit by discharging his personal loan obligations. On a realistic and purposive construction of section 8 ITTOIA 2005, Mr Burley remained the person entitled to the profits and was liable to income tax on them. The appeal was therefore dismissed.

Citation
[2025] UKFTT 989
Parties
Appellant: Craig William Burley; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
14 August 2025
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax) Final Judgment
Outcome
Appeal dismissed
Legal Topics
Assignment of Partnership Profits, Income Tax Liability, Equitable Assignment, Section 8 ITTOIA 2005, Partnership Profit Entitlement
Tax Law Partnership Law Assignment of Partnership Profits Income Tax Liability Equitable Assignment Section 8 ITTOIA 2005 Partnership Profit Entitlement

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Parties

Craig William Burley

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax) Final Judgment

Legal Issues

  1. 1 Whether the purported assignment of partnership profit interests by Mr Burley to an LLP was effective to divest him of entitlement to those profits for income tax purposes
  2. 2 Whether, even if the assignment was effective in equity, Mr Burley remained the person entitled to the profits under section 8 ITTOIA 2005

Ratio Decidendi

Even if the assignment of partnership profit interests by Mr Burley to the LLP was effective in equity, the commercial reality was that the profits continued to be applied for Mr Burley's benefit by discharging his personal loan obligations. On a realistic and purposive construction of section 8 ITTOIA 2005, Mr Burley remained the person entitled to the profits and was liable to income tax on them. The appeal was therefore dismissed.

Court Disposition

Appeal dismissed

Orders

  • Mr Burley remains liable to income tax on the partnership profits as assessed in the closure notices.