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Enjoyment rather than trade

25 November 2014
Issue: 4479 / Categories: Tax cases , Business , Capital Gains

E Blaney (TC4103)

The taxpayer sold land in County Down in July 2005 and claimed business asset taper relief on the gain. He said he used the land for breeding horses.

HMRC reduced the amount of taper relief on the basis the land had not been a business asset. The taxpayer appealed.

The issue before the First-tier Tribunal was whether the taxpayer’s horse breeding business constituted a trade. The judge referred to the badges of trade in Marson v Morton 59 TC 391 and considered them in relation to the taxpayer’s business.

The judge concluded that the taxpayer’s “principal motivation was his love of horses and horseracing”.

Breeding horses could amount to a trade in some circumstances, but it was on a small scale in the taxpayer’s case, carried out for his personal enjoyment rather than as a trade.

The taxpayer’s appeal was dismissed.

Issue: 4479 / Categories: Tax cases , Business , Capital Gains
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