Analysis: Ingenious film partners 2 - tribunal recharacterises commercial investments

Whilst there are some positives for taxpayers as regards the trading and profit motives of the relevant LLPs, the tribunal recharacterised – and considerably reduced – the ‘true’ commercial investments that the LLPs claimed to have made. Whilst those transactions were capable of producing benefits to investors, their benefits are likely to be substantially reduced. The alternative, however, could be worse. If the LLPs are right as to their investments, then the tribunal saw no basis for such investments being genuine and, in that case, benefits might be lost altogether.