Partnership allocations were miscellaneous income, not capital
In HMRC v HFFX LLP; Atkins & Ors v HMRC [2026] UKSC 17, the Supreme Court confirmed that allocations to individual members of a mixed-member partnership by a corporate member were chargeable to Income Tax as miscellaneous income under s.687 ITTOIA 2005. HMRC's argument that the amounts were taxable as profit shares under the profit-sharing arrangements rules in s.850 ITTOIA 2005 was rejected.
