The appellant partnership appealed against a decision of HMRC refusing to allow input tax recovery on legal fees incurred in bringing proceedings in the High Court to rescind certain transfers of farmland to a discretionary trust.
In 2011, the partners were Tom Bainbridge, Colin Bainbridge, Peter Bainbridge.⯠At that time, the partnership was farming three separate pieces of land, each one held separately by one of the partners.â¯
In 2011, the three plots of land were moved into a discretionary trust. â¯â¯ This was done to ensure that all of the land would remain available to the farming business: â¯Tom Bainbridge was at the time elderly and in poor health, and there were concerns that claims on the land might be made by other family members following his death.⯠At the time that the discretionary trust was established, it was believed that no CGT would be payable on this transaction. â
