Gray v Seymours Garden Centre (Horticulture) (A Firm)
| Jurisdiction | England & Wales |
| Judgment Date | 26 May 1995 |
| Date | 26 May 1995 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal (Civil Division).
Nourse, Beldam and Kennedy L JJ.
Robin Mathew QC (instructed by Badhams Thompson) for the taxpayers.
Timothy Brennan (instructed by the Solicitor of Inland Revenue) for the Crown.
The following cases were referred to in the judgment:
Carr (HMIT) v Sayer & Anor; Sayer & Anor v Carr (HMIT)TAX[1992] BTC 286
Cole Bros Ltd v Phillips (HMIT) TAXTAX(1982) 55 TC 188; [1982] BTC 208
IR Commrs v Barclay, Curle & Co Ltd WLR[1969] 1 WLR 675
IR Commrs v Scottish & Newcastle Breweries Ltd TAXTAX(1982) 55 TC 252; [1982] BTC 187
Wimpy International Ltd v Warland (HMIT) TAXTAXTAX(1987) 61 TC 51; [1987] BTC 591 (ChD); [1989] BTC 58 (CA)
Yarmouth v France ELR(1887) 19 QBD 647
Income tax - Capital allowances - Specially constructed greenhouse for creating suitable conditions for plants to be kept before sale - Whether "plant" for purposes of claiming first-year allowances -Finance Act 1971 section 41 subsec-or-para (1)Finance Act 1971, s. 41(1)(a) (first-year allowances were withdrawn progressively between 1984 and 1987 by the Finance Act 1984, see alsoCapital Allowances Act 1990 section 22Capital Allowances Act 1990, s. 22).
This was an appeal by the taxpayers against a judgment of Vinelott J ([1993] BTC 213), allowing a appeal from the determination of the general commissioners for Putney, whereby the judge held that a glasshouse specially constructed to preserve plants for sale in good condition was not "plant" attracting capital allowances.
The taxpayers carried on business in partnership as a garden centre. During the year to 30 April 1983 they constructed a "planteria". That was a glasshouse which created an environment in which growing plants would maintain their quality laid out to allow customers free passage between the benches.
The roof of the planteria was glazed with special glass allowing maximum light and heat retention; ventilation panes could be adjusted; heat was provided by paraffin heat boxes not part of the structure; and the floor consisted of paving slabs and shingle scattered under the benches to allow drainage.
The question before the Court of Appeal was whether the facts found by the general commissioners were such that no person acting judicially and properly instructed as to the relevant law could have come to the decision that the structure was "plant".
Held, dismissing the taxpayers' appeal:
The fact that the planteria provided the function of nurturing and preserving the plants while they were in it could not transform it into something other than the premises in which the business was carried on, nor could the fact that it was a purpose-built structure be enough to say that it was plant (Wimpy International Ltd v Warland (HMIT)TAX[1989] BTC 58 at pp. 56-66, per Fox LJ and Carr (HMIT) v Sayer & Anor TAX[1992] BTC 286 at p. 292, per Nicholls V-C applied).
Nourse LJ: The question on this appeal is whether it was open to general commissioners, on the facts of the case before them, to conclude that a planteria was "plant" within Finance Act 1971 section 41 subsec-or-para (1)s. 41(1)(a) of the Finance Act 1971, a provision now represented by Capital Allowances Act 1990 section 22 subsec-or-para (1)s. 22(1)(a) of the Capital Allowances Act 1990. The commissioners said that the expression "planteria" was believed to have originated in the US to describe a structure which housed ornamental plants.
The taxpayers are a partnership carrying on business under the name of Seymours Garden Centre (Horticulture) at the Garden Centre, Ewell By-pass, Ewell, Surrey. In the year ended 30 April 1983 they incurred expenditure of £14,902 on the construction of a planteria at the garden centre and in due course claimed first-year allowance under theFinance Act 1971 section 41Finance Act 1971, s. 41 which, so far as material, provided:
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(2) Subject to the provisions of this Chapter where-
(a) a person carrying on a trade incurs capital expenditure on the provision of machinery or plant for the purposes of the trade, and
(b) in consequence of his incurring the expenditure, the machinery or plant belongs to him at some time during the chargeable period related to the incurring of the expenditure,
(3) there shall be made to him for that period an allowance (in this Chapter referred to as "a first-year allowance") …
Finance Act 1971 section 42 subsec-or-para (1)Section 42(1), as amended in 1972, provided that a first-year allowance should be of an amount equal to the whole of the expenditure in respect of...
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