Identifiable part of a business

The taxpayer began trading as a food broker in 1995 representing nine suppliers. In 2008 he agreed to sell an element of his business to one of the suppliers.

As a consequence he could have no further contact with the customers of that supplier. He subsequently sold the entire concern to retire.

In his tax return he included the capital gain of £285 000 from the sale and claimed entrepreneurs’ relief on the sum.

HMRC denied the claim on the basis the disposal did not amount to the disposal of a separately identifiable business – although the department conceded that the assets were of a relevant business nature.

The taxpayer appealed saying his business effectively comprised nine parts one of which he had disposed of.

The First-tier Tribunal noted TCGA 1992 s 169I(2) stated that part...