McMorris v Revenue & Customs [2014] UKFTT 1116 (TC) (29 December 2014)

McMorris v Revenue & Customs [2014] UKFTT 1116 (TC) (29 December 2014)

The appellant's activities did not amount to a trade or a venture in the nature of trade, as the facts indicated the activity was more akin to indulging a hobby than conducting a commercial trade. Even if the activity were a trade, it was not carried on a commercial basis due to its informal, unstructured, and uncommercial nature. Therefore, loss relief under s.64 ITA 2007 was not available, and the restriction in s.66 ITA 2007 would have applied in any event.

Citation
[2014] UKFTT 1116
Parties
Appellant: Ewan Leslie James McMorris; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
29 December 2014
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax Chamber) Substantive Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Loss Relief, Trade Definition, Commercial Basis Requirement
Tax Law Income Tax Loss Relief Trade Definition Commercial Basis Requirement

Case Brief

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Parties

Ewan Leslie James McMorris

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax Chamber) Substantive Decision

Legal Issues

  1. 1 Whether the appellant's racehorse activity amounted to a trade under s.64 ITA 2007
  2. 2 Whether the activity was carried on a commercial basis as required by s.66 ITA 2007

Ratio Decidendi

The appellant's activities did not amount to a trade or a venture in the nature of trade, as the facts indicated the activity was more akin to indulging a hobby than conducting a commercial trade. Even if the activity were a trade, it was not carried on a commercial basis due to its informal, unstructured, and uncommercial nature. Therefore, loss relief under s.64 ITA 2007 was not available, and the restriction in s.66 ITA 2007 would have applied in any event.

Court Disposition

Appeal dismissed

Orders

  • Loss relief claim disallowed
  • No relief available under s.64 ITA 2007