LLPs and intangibles: avoiding traps in M&A and intra-group transfers

Intra-group transfers of intangible fixed assets (IFAs) to or from LLPs are increasingly common as precursors to M&A transactions or post-acquisition tidy ups. Unfortunately, the tax treatment of such transfers seems confused and makes tax neutral reorganisations involving IFAs materially harder to achieve than those involving chargeable gains assets. One reason is that while the recent case of Muller tells us to apply market value deeming provisions to LLPs as if they are companies, CTA 2009 prevents LLPs from being part of tax neutral groups precisely because they are not. Elements of the reasoning in Conran provide a possible workaround.