The Executors of Keith Denis Lewis Beresford (Deceased) v The Commissioners for HMRC
[2024] UKFTT 952 (TC)
Eva Mary Butler & Ors v The Commissioners for HMRC
27 September 2023
[2023] UKFTT 872 (TC)
First-tier Tribunal
A family's wedding barn business was taxed because the court decided it was mainly about making money from renting out the property, not from the extra services offered to wedding couples. Even though they did extra things like giving advice and providing some equipment, the main focus was still making money from renting the barn itself.
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.