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 activities with consecutive losses, not just 'hobby' farming; the appellant's farming activities did not meet the reasonable expectation of profit test in section 68; HMRC could not reasonably have been expected to be aware of the five years of losses from the information made available, so the discovery assessment for 2008-09 is valid.

Citation
[2015] UKFTT 532 (TC)
Parties
Appellant: Peter Silvester; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
30 October 2015
Procedural Posture
Tax Appeal / First Tier Tribunal 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

Tax Appeal / First Tier Tribunal 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 HMRC's discovery assessment under section 29 Taxes Management Act 1970 valid?

Ratio Decidendi

Section 67 ITA applies to all farming activities with consecutive losses, not just 'hobby' farming; the appellant's farming activities did not meet the reasonable expectation of profit test in section 68; HMRC could not reasonably have been expected to be aware of the five years of losses from the information made available, so the discovery assessment for 2008-09 is valid.

Court Disposition

Appeal dismissed

Orders

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