The Court of Appeal held that two of the three appellant LLPs were trading, and that the Upper Tribunal was also wrong to decide that none of the LLPs was carrying on a trade with a view to profit.
The appellant Limited Liability Partnerships (LLPs) were involved in the production of films and video or computer games. The LLPs contended that, in their early years, investors could set trading losses from those activities against their other taxable income if appropriate. HM Revenue and Customs (HMRC) denied the loss relief claims. The LLPs appealed.
The First-tier Tribunal (FTT) ([2016] UKFTT 521 (TC)) concluded (among other things): (1) Two LLPs (IFP2 and ITP) were carrying on a trade, but the third LLP (IG) was not; (2) None of the LLPs was carrying on a trade with a view to profit if ‘profit’ 
