Land was not used for business purposes as the taxpayer’s horse breeding activities did not amount to the carrying on of a trade on the land, such that business asset taper relief was not available upon disposal of the land.
The appellant taxpayer disposed of land in July 2005. He claimed capital gains tax (CGT) taper relief at the business asset rate on the disposal. Following an enquiry, HM Revenue and Customs (HMRC) amended the taxpayer’s return to restrict the taper relief, on the basis that the land was a non-business asset. The taxpayer appealed.
A business asset was defined for taper relief purposes as an asset used wholly or partly for the purposes of a trade carried on by an individual (TCGA 1992, Sch A1, para 5(1A)). The First-tier Tribunal (FTT) therefore had to consider whether the taxpayer’s horse breeding on the land amounted to a trading activity, for the purpose of claiming business asset taper
