Roulette V2 Charters LLP v Revenue & Customs (INCOME TAX - loss relief - loss in a trade) [2019] UKFTT 537 (TC) (15 August 2019)

Roulette V2 Charters LLP v Revenue & Customs (INCOME TAX - loss relief - loss in a trade) [2019] UKFTT 537 (TC) (15 August 2019)

The Tribunal found that although the Appellant intended to realise profits (satisfying Section 66(2)(b)), the prospects of profit were so remote that the trade was not carried on on a commercial basis for purposes of Section 66(2)(a). Therefore, loss relief against general income was not available.

Citation
[2019] UKFTT 537
Parties
Appellant: Roulette V2 Charters LLP; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
15 August 2019
Procedural Posture
Income Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Loss Relief, Commercial Basis, Sideways Relief, Limited Liability Partnership
Tax Law Income Tax Loss Relief Commercial Basis Sideways Relief Limited Liability Partnership

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Parties

Roulette V2 Charters LLP

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether the yacht chartering trade was carried on on a commercial basis for purposes of Section 66(2)(a) Income Tax Act 2007
  2. 2 Whether the trade was carried on with a view to the realisation of profits for purposes of Section 66(2)(b) Income Tax Act 2007
  3. 3 Whether losses are available for sideways relief against general income

Ratio Decidendi

The Tribunal found that although the Appellant intended to realise profits (satisfying Section 66(2)(b)), the prospects of profit were so remote that the trade was not carried on on a commercial basis for purposes of Section 66(2)(a). Therefore, loss relief against general income was not available.

Court Disposition

Appeal dismissed

Orders

  • Closure notices upheld
  • Loss relief against general income not available for relevant tax years