The executors of Lord Howard's estate sold a valuable portrait for a substantial gain. The executors claimed that the picture was a ‘wasting asset’, which was exempt from capital gains tax (CGT) under TCGA 1992, s 45(1). They argued that the picture was deemed (by TCGA 1992, s 44) to be a wasting asset with a predictable life not exceeding 50 years. This was on the basis the picture had been exhibited in a part of Lord Howard’s residence (Castle Howard) that was open to the public. Castle Howard is owned by a company, which operates a trade that includes exhibiting works of art to the visiting public. It was claimed that the picture was therefore ‘plant’ (within s 44(1)(c)) in the circumstances.

HMRC considered that the exemption from CGT did not apply. HMRC concluded that the picture was not plant. The First-tier Tribunal agreed, and held that the picture was therefore not a wasting asset, such that the gain was not exempt