Key Facts
- •Mr. Wardle appealed a closure notice denying his claim for Entrepreneurs' Relief (ER) on the disposal of his interest in Biomass UK No. 1 LLP.
- •The dispute centered on whether the LLP was a 'business' for ER purposes two years prior to the disposal date (February 28, 2018).
- •The LLP was involved in building a waste-to-energy power plant.
- •Significant preparatory work and contracts were in place by August 2015 (Financial Close), but the plant wasn't fully operational until later.
- •The key legal question was when the LLP commenced trading.
Legal Principles
Definition of 'business' for Entrepreneurs' Relief purposes: a trade, profession, or vocation conducted commercially with a view to profit.
Section 169S(1) TCGA 1992
Definition of 'trade': includes any venture in the nature of trade.
Section 989 ITA 2007
When a trade commences: requires a specific concept of the activity, set-up of the business (to the extent needed), and commencement of operational activities (dealings with third parties directly related to supplies, involving financial risk).
Mansell v R & C Commrs [2006] Sp C 551
Open justice principle in tax cases: paramount, with limited exceptions for anonymity.
HMRC v Banerjee (No 2) [2009] STC 1930; The Commissioners for His Majesty’s Revenue & Customs v The Taxpayer [2024] UKUT12 (TCC)
Precedent: First-tier Tribunal decisions are not binding on other First-tier Tribunal judges.
Wardle 2
Outcomes
Appeal allowed.
The Tribunal applied the *Mansell* test and found that the LLP had commenced trading by February 28, 2018, satisfying the requirements for ER. The Tribunal rejected the *Birmingham District Cattle* test as outdated and inconsistent with later case law.