Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Horsing around

17 October 2007
Issue: 4130 / Categories: Forum & Feedback , HMRC powers
My husband and wife clients have recently ceased full-time employment and have purchased, in their joint names, a farm comprising farmhouse, outbuildings and fields. No arable or livestock farming takes place and they plan three main activities of converting the outbuildings for use as holiday lets; providing livery for horses; and renting plots of land to private individuals for the storage/parking of caravans and other such vehicles.

Two other factors are that the clients have borrowed £400 000 of the £750 000 purchase price and that the husband does have another secondary source of income (about £400 a month) from a limited company of which he is director and shareholder and which is unconnected with this new business.
How should the new business be structured? Should it be one or should I suggest splitting it into say a partnership (e.g. for the lets) and two sole trades (say him doing the storage and her doing the livery)? Simplistically I wonder if there are VAT savings that could consequently be made or would HMRC attack such a structure?
Query T17 095 — Tonto.


Reply by Venta Belgarum:

All the proposed business ventures although property based involve an element of potential income variability and management input. And as both...

Only subscribers may read the full article

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.
back to top icon