In Leekes v HMRC, the Court of Appeal has upheld the decision of the Upper Tribunal (UT) concerning 'loss streaming'. The First Tier Tribunal (FTT) had originally found for the taxpayer that trade losses on a corporate hive up do not necessarily have to be streamed, where there is a 'succession' to the predecessor trade. In particular the FTT found that there is no explicit streaming rule in s343(3) ICTA 1988, and so the successor was able to set off all the losses of the predecessor against the combined profits. At the UT in May 2016, HMRC was successful with its appeal finding that there is indeed an implicit streaming rule in s343(3), and the Court of Appeal upheld this decision in May 2018.
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