Judgment from the Upper Tribunal in the GCH tax litigation

The taxpayers have successfully defended an appeal by HMRC before the Upper Tribunal in five joined cases.  HMRC had originally issued assessments to Capital Gains Tax or Corporation Tax in relation to a hedge fund/family office LLP, a company, and three family trusts.

The First-tier Tribunal found that the LLP was in business with a view to profit.  HMRC appealed.  In a decision handed down on 12 June 2026, the Upper Tribunal dismissed HMRC’s appeal.

Oliver Marre represented the five successful taxpayers.

The substantive issue in the case was whether GCH Active LLP was trading or carrying out business with a view to profit for the purposes of section 59A Taxation of Chargeable Gains Act 1992, when loan notes representing the sale consideration for the purchase of a significant shareholding in a PLC were transferred to it.

The FTT construed the word “business” as including the business of investment; and carried out an evaluative exercise of the facts on the evidence.  The FTT decided that the LLP was in business with a view to profit, and so the transfers made by the other entities (each of which being a member of the LLP) were tax neutral. HMRC had contended that the LLP was not trading or in business with a view to profit, so each of the other appellant entities made taxable disposals.

HMRC appealed against the FTT’s decision and the Upper Tribunal (Mr Justice Edwin Johnson and Judge Ashley Greenbank) have dismissed HMRC’s appeal as to both the law and its evaluation of the facts.  The Upper Tribunal also held that the FTT gave adequate reasons.

There were other issues in the case.  The Upper Tribunal agreed with the taxpayers that they did not need permission to rely on alternative reasons to uphold the FTT’s judgment; but it went on to dismiss those other reasons.

The full decision is available here.