The Supreme Court yesterday handed down its judgment in the case of R (on the application of De Silva and another) v Commissioners for Her Majesty's Revenue and Customs.

The appellants in the De Silva case were limited partners in partnerships which had been formed to take advantage of film tax incentives and loss reliefs potentially due in the early years of trading.

HMRC enquired into the partnerships’ tax returns and, in due course, concluded that no relief was due for a significant part of the expenditure said to have been incurred by the partnerships and issued closure notices. The closure notices were appealed to the Special Commissioners (as they were then).

Subsequently, the partnerships and HMRC entered into a settlement agreement with the agreed amount of losses being substantially less than originally claimed.