Murray v Revenue & Customs [2014] UKFTT 338 (TC) (10 April 2014)

Murray v Revenue & Customs [2014] UKFTT 338 (TC) (10 April 2014)

The Tribunal found that by the tax year 2010-11, the appellant's activities were not carried out on a commercial basis with a view to the realisation of profits, as required by Section 66 of the Income Tax Act 2007. There was no evidence of steps taken to reduce losses, no business plan, and no income generated, and the activities were sustained by tax rebates rather than profit motive. Therefore, the losses were not allowable against general income.

Citation
[2014] UKFTT 338
Parties
Appellant: Richard Murray; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
10 April 2014
Procedural Posture
Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Loss Relief, Commerciality of Trade, Race Horse Breeding and Training
Tax Law Income Tax Loss Relief Commerciality of Trade Race Horse Breeding and Training

Case Brief

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Parties

Richard Murray

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether the appellant's race horse bloodstock breeding and training activities constituted a taxable trade
  2. 2 Whether the trade was carried on a commercial basis with a view to the realisation of profits under Income Tax Act 2007, Sections 64 and 66

Ratio Decidendi

The Tribunal found that by the tax year 2010-11, the appellant's activities were not carried out on a commercial basis with a view to the realisation of profits, as required by Section 66 of the Income Tax Act 2007. There was no evidence of steps taken to reduce losses, no business plan, and no income generated, and the activities were sustained by tax rebates rather than profit motive. Therefore, the losses were not allowable against general income.

Court Disposition

Appeal dismissed

Orders

  • Loss relief claim for 2010-11 disallowed
  • Closure Notice upheld