MacDonald v Revenue and Customs (INCOME TAX - loss relief - loss in trade - whether a trade was carried on by the Appellant) [2025] UKFTT 495 (TC) (01 May 2025)

MacDonald v Revenue and Customs (INCOME TAX - loss relief - loss in trade - whether a trade was carried on by the Appellant) [2025] UKFTT 495 (TC) (01 May 2025)

The Tribunal found that although the Appellant's shoot constituted a trade, it was not carried on throughout the relevant tax years on a commercial basis or with a realistic view to the realisation of profits as required by s 66 ITA 2007. The shoot made consistent losses, lacked sufficient commercial organisation, and was not sufficiently integrated with the wider estate to be considered part of a larger undertaking. Therefore, loss relief under s 64 ITA 2007 was not available for set-off against general income.

Citation
[2025] UKFTT 495
Parties
Appellant: Charlotte Macdonald; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
01 May 2025
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax) Judgment
Outcome
Appeal dismissed
Legal Topics
Income Tax, Loss Relief, Commercial Basis Test, Section 64 ITA 2007, Section 66 ITA 2007, Discovery Assessment, Closure Notice
Tax Law Income Tax Loss Relief Commercial Basis Test Section 64 ITA 2007 Section 66 ITA 2007 Discovery Assessment Closure Notice

Case Brief

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Parties

Charlotte Macdonald

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax) Judgment

Legal Issues

  1. 1 Whether the Appellant's woodland shoot was a trade carried on on a commercial basis and with a view to the realisation of profits under s 66 ITA 2007
  2. 2 Whether losses from the shoot can be set off against general income under s 64 ITA 2007
  3. 3 Whether the shoot was part of a larger undertaking for the purposes of s 66(4) ITA 2007

Ratio Decidendi

The Tribunal found that although the Appellant's shoot constituted a trade, it was not carried on throughout the relevant tax years on a commercial basis or with a realistic view to the realisation of profits as required by s 66 ITA 2007. The shoot made consistent losses, lacked sufficient commercial organisation, and was not sufficiently integrated with the wider estate to be considered part of a larger undertaking. Therefore, loss relief under s 64 ITA 2007 was not available for set-off against general income.

Court Disposition

Appeal dismissed

Orders

  • The Appellant is not entitled to set off the shoot losses against general income under s 64 ITA 2007 for the relevant years.
  • The discovery assessment and closure notices issued by HMRC are upheld.