Thorne v Revenue & Customs [2014] UKFTT 730 (TC) (30 July 2014)

Thorne v Revenue & Customs [2014] UKFTT 730 (TC) (30 July 2014)

The appellant's equestrian breeding business was not carried on a commercial basis with a view to the realisation of profits, as evidenced by escalating losses, lack of income, and insufficient evidence of a reasonable expectation of profit. The asparagus venture, though commercial, was at too early a stage to affect the overall assessment. As the trades were treated as a composite whole, the claim for sideways loss relief failed under s.66 ITA 2007.

Citation
[2014] UKFTT 730 (TC)
Parties
Appellant: Judith Thorne; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
30 July 2014
Procedural Posture
Appeal Against Closure Notice (income Tax Self Assessment) / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Self Assessment, Loss Relief, Section 64 Income Tax Act 2007, Section 66 Income Tax Act 2007, Commercial Basis Test, Reasonable Expectation of Profit
Tax Law Income Tax Self Assessment Loss Relief Section 64 Income Tax Act 2007 Section 66 Income Tax Act 2007 Commercial Basis Test Reasonable Expectation of Profit

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Parties

Judith Thorne

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Appeal Against Closure Notice (income Tax Self Assessment) / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether the appellant's trade was carried on a commercial basis with a view to the realisation of profits for the purposes of sideways loss relief under s.64 and s.66 Income Tax Act 2007
  2. 2 Whether the equestrian and asparagus trades should be treated as one composite trade for tax purposes
  3. 3 Whether the reasonable expectation of profit test was satisfied

Ratio Decidendi

The appellant's equestrian breeding business was not carried on a commercial basis with a view to the realisation of profits, as evidenced by escalating losses, lack of income, and insufficient evidence of a reasonable expectation of profit. The asparagus venture, though commercial, was at too early a stage to affect the overall assessment. As the trades were treated as a composite whole, the claim for sideways loss relief failed under s.66 ITA 2007.

Court Disposition

Appeal dismissed

Orders

  • Closure Notice and amended return to stand
  • No sideways loss relief available for 2008-2009 tax year