Whyte v Revenue & Customs (INCOME TAX AND CAPITAL GAINS TAX - sale of serviced building plots in grounds of Grade I listed building - sale proceeds used for restoration of listed building) [2021] UKFTT 270 (TC) (26 July 2021)

Whyte v Revenue & Customs (INCOME TAX AND CAPITAL GAINS TAX - sale of serviced building plots in grounds of Grade I listed building - sale proceeds used for restoration of listed building) [2021] UKFTT 270 (TC) (26 July 2021)

The Tribunal found that the sales of the plots were not trading transactions but capital disposals. However, most of the plots did not fall within the permitted area for PRR under s222 TCGA 1992, so PRR was not available except for part of the land. The conservation deficit was not deductible for tax purposes as it is not a statutory deduction under tax law.

Citation
[2021] UKFTT 270
Parties
Appellant: Heather Whyte; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
26 July 2021
Procedural Posture
Tax Appeal / First Tier Tribunal (tax) Substantive Decision After Hearing
Outcome
Appeal allowed in part, dismissed in part
Legal Topics
Income Tax, Capital Gains Tax, Private Residence Relief, Trading Vs Capital Gains, Enabling Development, Listed Buildings, Conservation Deficit
Tax Law Income Tax Capital Gains Tax Private Residence Relief Trading Vs Capital Gains Enabling Development Listed Buildings Conservation Deficit

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Parties

Heather Whyte

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal (tax) Substantive Decision After Hearing

Legal Issues

  1. 1 Whether the sale of serviced building plots in the grounds of a Grade I listed building constituted trading income or capital gains for tax purposes
  2. 2 Whether private residence relief (PRR) applied to the disposals under s222 TCGA 1992
  3. 3 Whether the conservation deficit on the Hall was deductible in computing profit or gain

Ratio Decidendi

The Tribunal found that the sales of the plots were not trading transactions but capital disposals. However, most of the plots did not fall within the permitted area for PRR under s222 TCGA 1992, so PRR was not available except for part of the land. The conservation deficit was not deductible for tax purposes as it is not a statutory deduction under tax law.

Court Disposition

Appeal allowed in part, dismissed in part

Orders

  • Closure notices varied to reflect that disposals were capital gains, not trading income
  • Private residence relief allowed only to the extent of the permitted area as determined by the Tribunal