Silvester v Revenue & Customs (INCOME TAX/CORPORATION TAX : Losses) [2015] UKFTT 532 (TC) (30 October 2015)

Silvester v Revenue & Customs (INCOME TAX/CORPORATION TAX : Losses) [2015] UKFTT 532 (TC) (30 October 2015)

Section 67 ITA applies to all farming trades with losses in each of the previous five tax years, regardless of whether the trade is commercial or a hobby; the appellant's farming activities did not meet the reasonable expectation of profit test in section 68 ITA, as a competent farmer in 2000 could not reasonably have expected profitability only after 2009-10 or 2010-11; information in previous tax returns did not constitute 'information made available' under section 29(6)-(7) TMA, so the discovery assessment for 2008-09 was valid.

Citation
[2015] UKFTT 532
Parties
Appellant: Peter Silvester; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
30 October 2015
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Loss Relief, Farming Losses, Discovery Assessment
Tax Law Income Tax Loss Relief Farming Losses Discovery Assessment

Case Brief

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Parties

Peter Silvester

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

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

Legal Issues

  1. 1 Does section 67 Income Tax Act 2007 restrict loss relief for farming losses to 'hobby' farming?
  2. 2 Did the appellant's farming activities meet the 'reasonable expectation of profit' test in section 68 Income Tax Act 2007?
  3. 3 Was the discovery assessment under section 29 Taxes Management Act 1970 valid?

Ratio Decidendi

Section 67 ITA applies to all farming trades with losses in each of the previous five tax years, regardless of whether the trade is commercial or a hobby; the appellant's farming activities did not meet the reasonable expectation of profit test in section 68 ITA, as a competent farmer in 2000 could not reasonably have expected profitability only after 2009-10 or 2010-11; information in previous tax returns did not constitute 'information made available' under section 29(6)-(7) TMA, so the discovery assessment for 2008-09 was valid.

Court Disposition

Appeal dismissed

Orders

  • Loss relief for farming losses in 2008-09 and 2009-10 disallowed
  • Discovery assessment for 2008-09 upheld