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ARTICLE · 01 NOVEMBER 2024

Private Client Review For October 2024

Macfarlanes LLP
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Macfarlanes LLP

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Recent FTT rulings highlight key tax relief requirements: EIS relief requires active trading, BPR disqualifies mainly investment businesses, open justice prevails in tax cases, and reasonable excuse tests remain objective, irrespective of advisor reliance.

United KingdomTax
Edward Reed
Edward Reed
Clare Wilson
Clare Wilson

This month, we consider the types of business that qualify for various tax reliefs and the thresholds which must be met. In Putney Power Ltd and another, EIS relief was denied by the FTT on the basis that the taxpayers had failed to commence trading within the requisite time limits – concluding that a trade commences only when the trader is 'open for business'. In Dimitrakis G Demetriou and another, the FTT considered that a fishery business did not qualify for BPR on the basis that it was mainly an investment business. Equity Advisory Ltd illustrates the high threshold for departing in tax litigation from the default position of open justice, even where this concerns a non-party. Finally, two recent FTT decisions (Hill and Farmer) remind us that the test for whether a taxpayer has a reasonable excuse for non-compliance with their tax obligations is an objective one, and so genuine reliance on an advisor or an honest (if mistaken) belief that they are not in default

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