Degorce v The Commissioners for HMRC

Degorce v The Commissioners for HMRC

The Court of Appeal held that the FTT's error of approach in disregarding evidence of Mr Degorce's other film-related activities was of limited significance and immaterial to the outcome. The FTT was entitled to conclude, on the evidence, that Mr Degorce was not carrying on a trade but merely acquired a contingent income stream through a pre-packaged scheme. The Upper Tribunal made no material error of law in upholding the FTT's decision. Accordingly, Mr Degorce was not entitled to trading loss relief for 2006/07.

Parties
Appellant: Patrick Degorce; Respondents: The Commissioners for Her Majesty's Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
06 October 2017
Procedural Posture
Civil Appeal (tax) / Appeal From Upper Tribunal (tax and Chancery Chamber) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Income Tax, Trading Losses, Film Investment Schemes, Definition of Trade, Tax Avoidance, Appeals From Tribunals
Tax Law Income Tax Trading Losses Film Investment Schemes Definition of Trade Tax Avoidance Appeals From Tribunals

Case Brief

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Parties

Patrick Degorce

Appellant

The Commissioners for Her Majesty's Revenue and Customs

Respondents

Procedural Posture

Civil Appeal (tax) / Appeal From Upper Tribunal (tax and Chancery Chamber) to Court of Appeal

Legal Issues

  1. 1 Whether Mr Degorce was carrying on a trade for the purposes of claiming trading loss relief under section 380(1) ICTA 1988 in the 2006/07 tax year
  2. 2 Whether the First-tier Tribunal and Upper Tribunal erred in law in their approach to the evidence and the definition of trade
  3. 3 Whether the Upper Tribunal should have set aside the FTT decision due to an error of law

Ratio Decidendi

The Court of Appeal held that the FTT's error of approach in disregarding evidence of Mr Degorce's other film-related activities was of limited significance and immaterial to the outcome. The FTT was entitled to conclude, on the evidence, that Mr Degorce was not carrying on a trade but merely acquired a contingent income stream through a pre-packaged scheme. The Upper Tribunal made no material error of law in upholding the FTT's decision. Accordingly, Mr Degorce was not entitled to trading loss relief for 2006/07.

Court Disposition

Appeal dismissed

Orders

  • Mr Degorce's appeal is dismissed.
  • No trading loss relief is available to Mr Degorce for the 2006/07 tax year.