Gittos v Barclay
| Jurisdiction | England & Wales |
| Judgment Date | 05 March 1982 |
| Date | 05 March 1982 |
| Court | Chancery Division |
Chancery Division.
The taxpayer appeared on his own behalf.
Mr. R. Carnwath (instructed by the Solicitor of Inland Revenue) for the Crown.
Before: Goulding J.
Income tax - Assessment of rents received under Income and Corporation Taxes Act 1970 schedule DSch. D, Case VI - Rents received from lettings of two holiday villas - Activities by taxpayer in cleaning, advertising and renting villas - Claim that activities constituted a trade - General Commissioners upheld assessments - Whether determination of Commissioners wrong in law or unreasonable -Income and Corporation Taxes Act 1970 section 67 subsec-or-para (1)Income and Corporation Taxes Act 1970 - sec. 67(1);Income and Corporation Taxes Act 1970 schedule D schedule DSch. D, Case I and Case VI - Taxes Management Act 1970 section 56Taxes Management Act 1970 - sec. 56.
This was an appeal by the taxpayer from a finding of the General Commissioners that rents received from the leasing of two holidays villas were subject to assessment under Income and Corporation Taxes Act 1970 schedule DCase VI of Sch. D, rather than being assessable as trade receipts under Income and Corporation Taxes Act 1970 schedule DCase I of Sch. D.
The receipts in issue were received from lettings of two holiday villas tenanted by the taxpayer's wife. The villas were situated in a serviced holiday village. It was possible for all work to be undertaken in relation to the villas by the landlord, but the taxpayer did not use the landlord's services. Instead, he and his wife undertook the details of advertising, cleaning and leasing the villas personally.
Before the court an argument, not laid before the Commissioners, was made to the effect that the holiday occupiers of the villas were licensees rather than tenants and that, accordingly para. 4 inIncome and Corporation Taxes Act 1970 section 67 subsec-or-para (1)sec. 67(1) of the Income and Corporation Taxes Act 1970 is not applicable.
The taxpayer also argued that the activities undertaken in relation to the villas met the tests of a "trade" as set out by Lord Wilberforce in Ransom v. Higgs. "Intention", it was claimed, was shown by the fact that the enterprise was run under a registered business name. The degree, frequency and organisation of the activities were all detailed.
The Crown contended that the income was principally from exploitation of the property rather than from any trade carried on.
Held, appeal dismissed.
1. The issue of whether there was the grant of a lease or of a licence was not the subject of argument before the General Commissioners and therefore is not a matter which can be dealt with by this Court.
2. Taxes Management Act 1970 section 56Section 56of the Taxes Management Act 1970 allows the Court to interfere with the decision of the General Commissioners only if it was wrong in law or if it was an unreasonable decision given the facts advanced. Nothing in this appeal leads to a conclusion that the Commissioners misdirected themselves as to the law, or to a finding that their decision was unreasonable on the facts available to them.
Goulding J.: This is an appeal from a decision of the Cheltenham General Commissioners in an income tax matter. The Appellant, Mr. Gittos, was assessed in respect of the years 1978/79 and 1979/80 in certain sums representing receipts of money arising from the ownership and use by his wife of certain accommodation, holiday villas, near Looe. The Inspector of Taxes relied on assessments under Income and Corporation Taxes Act 1970 schedule DCase VI of Sch. D, those being appropriate by virtue of Income and Corporation Taxes Act 1970 schedule Apara. 4 of Sch. A set out in Income and Corporation Taxes Act 1970 section 67subsec. (1) of sec. 67 of the Income and Corporation Taxes Act 1970, so the Inspector said. Mr. Gittos, on the other hand, contended before the General Commissioners and contends before me (where he has put his case, if I may say so, with great clarity and moderation) that his wife was carrying on a trading activity with this property that she owned, and that the sums in...
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