Ingenious, but flawed

After 22 days hearing the case earlier this year the Upper Tribunal published at the end of July its decision in Ingenious Games LLP [2019] UKUT 0226 (TCC) also involving Inside Track Productions LLP and Ingenious Film Partners 2 LLP. It’s a lengthy document (though less than a third of the First-tier Tribunal’s gargantuan 1 843 paragraphs) analysing in detail the arguments and counter-arguments put forward by the seven QCs and eight junior counsel involved in the case. Nonetheless the key point could be understood by a child of ten.

The scheme depended upon the ability to offset trading losses against participants’ other income. It was therefore a necessary condition of the scheme that a trade should be carried on. If it was not the edifice that had been carefully and expensively constructed would prove to have been built on sand with...