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Taxpayer entitled to entrepreneurs’ relief as LLP had commenced trading

By Mark McLaughlin, September 2024

The taxpayer was entitled to entrepreneurs’ relief on his disposal of an interest in an LLP, as it was found that the LLP had commenced trading, and that the trading requirement was satisfied for entrepreneurs’ relief purposes. 

Between 2008 and 2014, third parties obtained project rights for a power plant (the ‘Hull Project’). In early 2014, the appellant (as part of a development team) purchased the Hull Project, including all associated rights, from the third parties. In February 2015, exclusive Heads of Terms were entered into with a funder for the financing of the Hull Project. On 12 June 2015, a limited liability partnership (LLP) was established as the special purchase vehicle for the Hull Project. On 24 June 2015, the LLP entered into a connection agreement with the grid company to connect the LLP to the grid company’s distribution system. On 18 August 2015: (1) a new partnership agreement was signed, pursuant to which

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