An Intelligent Businessman Still Exists
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has been a current trend by HMRC Capital Taxes
Office to classify businesses which have been treated as a trade. The
results have been recorded on the trading pages of the Tax Return,
National Insurance has been applied and yet when the owner of that
dies there have been problems in claiming the business property relief
might seem that for many businesses retirement is a
comfortable and warm option and therefore the test to BPR is not one
to be considered. This is not the case with farming, alternative land
the rural way of life but the question has been looked at quite
seriously in Pawson (Nicolette
(Deceased) v HMRC  UKUT 050 (TC) and also in Zetland
(Trustees of David Zetland Settlement v HMRC  UKFTT
Approach by HMRC
HMRC approach seems flawed in that it looked at
what is being provided and sees the provision of land and possibly
the main supply with some services and therefore looks at the level of
services, and from this approach it is very easy to argue that a
not a trading business, it is the wrong side of the investment line.
of this are liveries, particularly DIY liveries, and holiday lettings.
a lot more organisation with liveries and lettings, although they do
common core in that an intelligent businessman would see this operation
trading business and something that was always intended to achieve
tax relief. However HMRC are pushing back the boundary and their prize
appear to be a very large potential tax take.
average age of a farmer in the UK
owns their own land is understood to be in their 70s or 80s. The value
potential development land and farm property has “rocketed” in recent
and this appears an easy target for HMRC. The HMRC attacks are very
comprehensive. They seem to be attacking so many different areas of
agricultural property relief (APR) and BPR. Examples of potential
mixed estate that has too
many investment properties which have greater income and value than the
of the farmhouse
for the last few years where the farmer has “semi-retired” due to ill
and buildings full of “junk” that was not used in the trade.
farmhouse surrounded by
let land so it is not actually occupied for agriculture.
list is endless and HMRC are very keen to collect
more tax through aggressive correspondence whilst ignoring the
businessman. The argument has to be when looking at the investment line
intelligent businessman still exists and still would look at so many of
occupations as a business for BPR.
arguments must be presented and we must always
remember to argue that an intelligent businessman still exists.
About the Author
by Julie Butler
F.C.A. Butler &
Co, Bennett House, The Dean, Alresford, Hampshire, SO24 9BH.
Tel: 01962 735544. Email: firstname.lastname@example.org.
F.C.A. is the author of Tax Planning for
Farm and Land Diversification (Bloomsbury
Professional), Equine Tax Planning ISBN:
0406966540, and Stanley: Taxation of Farmers
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Article Published/Sorted/Amended on Scopulus 2014-06-06 09:06:37 in Tax Articles