Key Facts
- •Helen Butler died on 15 May 2015, holding an interest in Tufton Warren Farm LLP.
- •The LLP's activities included farming, commercial lettings, and a wedding venue business (Clock Barn).
- •HMRC denied business property relief (BPR) for inheritance tax purposes, claiming the LLP's business consisted wholly or mainly of holding investments.
- •The appeal focused on whether Clock Barn's wedding business was primarily an investment activity.
- •Clock Barn initially offered a bare venue; later, renovations and additional services were added.
- •The LLP used Country House Wedding Venues (CHWV) for marketing and Galloping Gourmet (GG) for catering.
- •The LLP provided various services, including showarounds, advice, coordination with suppliers, maintenance, and facilities.
- •Two licences were relevant: a wedding venue licence and a premises licence.
Legal Principles
Investment is not a term of art but has the meaning an intelligent businessman would give it; considering asset use and how it's turned to account.
McCall and others v HMRC [2009] NICA 12
A property may be held as an investment even with active steps taken in connection with it.
McCall and others v HMRC [2009] NICA 12
Land is generally held as an investment where gain is derived from payments for its use.
McCall and others v HMRC [2009] NICA 12, George v IRC [2003] EWCA Civ 1763
The exploitation of land for profit can be an investment activity; holding property for letting is generally holding it for investment.
George v IRC [2003] EWCA Civ 1763
For composite businesses, consider all activities in the round; don't isolate investment-related activities.
George v IRC [2003] EWCA Civ 1763
Owning and holding land for income is generally an investment activity, even if actively managed.
HMRC v Personal representatives of Pawson [2013] UKUT 50 (TCC)
The test is not the degree of activity, but the nature of the activities.
HMRC v Personal representatives of Pawson [2013] UKUT 50 (TCC)
No presumption that a business exploiting land for profit is an investment business; consider the business in its entirety.
HMRC v Personal representatives of Vigne [2018] UKUT 357 (TCC)
Outcomes
Appeal dismissed.
The wedding venue business was wholly or mainly for holding property as an investment.