Lucy v Revenue and Customs (INCOME TAX/CORPORATION TAX : Losses) [2016] UKFTT 85 (TC) (09 February 2016)

Lucy v Revenue and Customs (INCOME TAX/CORPORATION TAX : Losses) [2016] UKFTT 85 (TC) (09 February 2016)

The appellant failed to prove he was trading on a commercial basis in car hire or as a foreign exchange trader in the tax years 2010/11 and 2011/12. His activities lacked the characteristics of ordinary trading and were conducted in a casual, non-commercial manner. The discovery assessment for 2010/11 was validly raised as the insufficiency of tax was not reasonably apparent from the information available at the relevant time.

Citation
[2016] UKFTT 85 (TC)
Parties
Appellant: Christopher Lucy; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
09 February 2016
Procedural Posture
Tax Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Corporation Tax, Trade Loss Relief, Discovery Assessment, Commercial Basis of Trade
Tax Law Income Tax Corporation Tax Trade Loss Relief Discovery Assessment Commercial Basis of Trade

Case Brief

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Parties

Christopher Lucy

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether the appellant was trading on a commercial basis in the relevant years so as to establish entitlement to claim trade loss relief against general income under Section 64 Income Tax Act 2007
  2. 2 Whether the conditions for raising a discovery assessment for 2010/11 were met under Section 29 Taxes Management Act 1970

Ratio Decidendi

The appellant failed to prove he was trading on a commercial basis in car hire or as a foreign exchange trader in the tax years 2010/11 and 2011/12. His activities lacked the characteristics of ordinary trading and were conducted in a casual, non-commercial manner. The discovery assessment for 2010/11 was validly raised as the insufficiency of tax was not reasonably apparent from the information available at the relevant time.

Court Disposition

Appeal dismissed

Orders

  • The appellant’s appeal against the discovery assessment for 2010/11 is dismissed.
  • The appellant’s appeal against the Revenue amendment to his tax return for 2011/12 is dismissed.