Julian Nott v The Commissioners For Her Majesty's Revenue & Customs, TC 04897
| Jurisdiction | UK Non-devolved |
| Judge | Thomas SCOTT |
| Judgment Date | 18 February 2016 |
| Neutral Citation | [2016] UKFTT 0106 (TC) |
| Respondent | The Commissioners For Her Majesty's Revenue & Customs |
| Appellant | Julian Nott |
| Reference | TC 04897 |
| Court | First-tier Tribunal (Tax Chamber) |
DM_EU 11156782-2.PG0440.0110
[2016] UKFTT 0106 (TC)
TC04897
Appeal number:TC/2014/04119
Whether income from letting holiday cottages property or trading income –
appropriate tests to be applied – meaning of “occupation” – relevance of HMRC
practice in relation to hotels and bed and breakfasts – section 10 ITTOIA – furnished
holiday lettings rules – income held to be property income
FIRST-TIER TRIBUNAL
TAX CHAMBER
JULIAN NOTT Appellant
- and -
THE COMMISSIONERS FOR HER MAJESTY’S Respondents
REVENUE & CUSTOMS
TRIBUNAL:
JUDGE THOMAS SCOTT
KAMAL HOSSAIN FCA FCIB
Sitting in public at Fox Court, London EC1 on 14 September 2015
The Appellant in person
Mr Simon Bracegirdle, HM Revenue and Customs for the Respondents
© CROWN COPYRIGHT 2016
DM_EU 11156782-2.PG0440.0110 2
DECISION
The Appeal
1. This is an appeal against a closure notice which has been issued to the
Appellant, Mr Nott, for the tax year 2009-10 under sections 28A(1) and (2) of
the Taxes Management Act 1970 (“TMA 1970”).
2. The issue is whether certain income received by the Appellant in that year is
property income or trading income. The technical issue in the appeal is
whether losses from the activity giving rise to that income can be set against
the Appellant’s income for 2009-10 for the purposes of Class 4 National
Insurance Contributions. The issue of greater practical significance is the
ability of the Appellant to set off such losses for subsequent years against his
general income for income tax purposes.
The Legislation
3. There are various provisions relating to the taxation of income from property
contained in the Income Tax (Trading and Other Income) Act 2005
(“ITTOIA”). Those which are relevant to the appeal are set out below. The
order in which they are set out is intended to aid understanding of the statutory
framework.
4. Section 5, contained in Part 2 of the Act, charges to income tax the profits of a
“trade”.
5. Section 268, contained in Part 3 of the Act, charges to income tax “the profits
of a property business”.
6. Section 264 provides:
264 property business
(1) A person’s UK property business consists of -
a) every business which the person carries on for generating
income from land in the United Kingdom, and
b) every transaction which the person enters into for that purpose
otherwise than in the course of such a business.
7. Sections 266 and 267 provide:
266 Meaning of “generating income from land”
(1) In this Chapter “generating income from land” means exploiting an
estate, interest or right in or over land as a source of rents or other
receipts.
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