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London Luton BPRA Property Fund LLP v HMRC

HMRC have secured a major victory in the case of London Luton BPRA Property Fund LLP v HMRC, which concerns the availability of business premises renovation allowances, a type of capital allowances. The case relates to the conversion of a property into a hotel situated near London Luton airport.

The issues in the case included whether various items of expenditure qualified for allowances, including: (1) expenditure on a “support package” for bank borrowing, (2) a proportion of the developer’s fee, (3) expenditure on fees of IFAs and promoters, and (4) expenditure on certain franchise costs.

It is the first case to consider the legislation in any detail.

HMRC had succeeded in part before the First Tier Tribunal (FTT). The UT subsequently re-made the FTT’s decision in part. HMRC appealed to the Court of Appeal in relation to expenditure that the FTT and/or UT had decided qualified for BPRA.

The Court of Appeal allowed HMRC’s appeal on all grounds and dismissed the LLP’s cross-appeal.

Nicholas Macklam acted for HMRC and made the submissions on HMRC’s appeal in relation to the IFA and promoter fees and franchise costs. He was instructed together with Jonathan Davey KC, John Brinsmead-Stockham KC and Sam Chandler.

The judgment can be viewed on BAILII here.