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 demonstrate trading on a commercial basis in car hire or foreign exchange in 2010/11 and 2011/12. His activities lacked the characteristics of ordinary trading and were not conducted with a serious intention to realise profits. The respondents validly raised the discovery assessment for 2010/11 as they could not have been reasonably aware of the insufficiency of tax from the information provided in the appellant’s return.

Citation
[2016] UKFTT 85
Parties
Appellant: Christopher Lucy; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
09 February 2016
Procedural Posture
Income Tax/corporation Tax Appeal / First Tier Tribunal (tax Chamber) Final Judgment
Outcome
Appeal dismissed
Legal Topics
Trade Loss Relief, Commercial Trading, Discovery Assessment, Income Tax Act 2007, Taxes Management Act 1970
Tax Law Trade Loss Relief Commercial Trading Discovery Assessment Income Tax Act 2007 Taxes Management Act 1970

Case Brief

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Parties

Christopher Lucy

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax/corporation Tax Appeal / First Tier Tribunal (tax Chamber) Final Judgment

Legal Issues

  1. 1 Whether the appellant was trading on a commercial basis in the relevant years to establish entitlement to claim trade loss relief against general income
  2. 2 Whether the respondents fulfilled the conditions necessary to raise the discovery assessment for 2010/11
  3. 3 Whether the appellant was trading in car hire and/or as a foreign exchange trader in 2010/11 and 2011/12

Ratio Decidendi

The appellant failed to demonstrate trading on a commercial basis in car hire or foreign exchange in 2010/11 and 2011/12. His activities lacked the characteristics of ordinary trading and were not conducted with a serious intention to realise profits. The respondents validly raised the discovery assessment for 2010/11 as they could not have been reasonably aware of the insufficiency of tax from the information provided in the appellant’s return.

Court Disposition

Appeal dismissed

Orders

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