The First-tier Tribunal has handed down its decision in Inside Track 3 LLP and Ingenious Film Partners 2 LLP v. HMRC [2025] UKFTT 986, which is the latest decision to be released in the long running and high-value “Ingenious” film litigation. Edward Waldegrave, led by Jonathan Peacock KC, appeared for the successful taxpayers. They were instructed by White & Case LLP.
The Ingenious litigation concerns the tax consequences of investment in film production by various LLPs. It has given rise to various decisions by the First-tier Tribunal, the Upper Tribunal and the Court of Appeal, and Edward has acted for the taxpayer LLPs throughout the litigation. Most of the substantive issues were finally resolved in 2021 when the Court of Appeal released its decision (see Ingenious Games LLP and Others v. HMRC [2021] EWCA Civ. 1180). Following this, the parties sought to agree the detailed tax implications of the various decisions for the LLPs and their members. The parties were unable to agree whether the FTT had already decided that rights acquired by the LLPs constituted “intangible fixed assets” for the purposes of Part 8 of the Corporation Tax Act 2009 (which had implications for the availability of relief for corporate members of the LLPs). The LLPs’ position was that this issue had been determined in their favour by the FTT (Judge Hellier and Mr. Stafford) in the decision which it released in 2017 and (given that HMRC had not appealed against the relevant conclusion) that the matter was now final. HMRC, on the other hand, argued that the FTT had not determined the issue and that it remained to be decided.
In the latest decision, the FTT (Judge Sukul and Mr. McBride) decided (in the LLPs’ favour) that the FTT’s 2017 decision had determined that the rights in question constituted “intangible fixed assets”. Its decision involved considering both the extensive factual and expert evidence which had previously been before the FTT, and the legal principles concerning the circumstances in which it is appropriate to look at material beyond the words of a judgement itself in interpreting it. In broad terms, the FTT concluded that it should focus solely on the wording of the relevant 2017 decision, and should not consider extraneous material. The decision should bolster the finality of FTT decisions; where a party does not appeal, it will be difficult for it later to argue that the FTT has not in fact determined an issue which appears on the face of the decision to have been addressed.
