In Richard Murray v HMRC (TC03474 – 10 April 2014) Mr Murray claimed losses in relation to a race horse breeding and trading business which totalled about £130 000 over a three year period.
HMRC had denied the claim on the basis that the taxpayer did not carry a commercial activity with a reasonable expectation of profit (ITA 2007 s 66(2)).
The tribunal considered that the taxpayer may have had a reasonable expectation of profit at the outset of his business however that hope must have ‘evaporated’ when losses were realised in three consecutive tax years. Furthermore there was no evidence that Mr Murray had attempted to quantify the losses or to reduce them by producing a business plan.
Finally Mr Murray’s comment that the viability of his horse breeding business depended upon his obtaining tax rebates on his other incomes confirmed that his view...
90a1d87b-c1b5-43c3-a720-cd324830adee.tmb-editorspic.jpg?sfvrsn=1b2d0a7e_1)
