No evidence to support claim

The taxpayers were in partnership as printers. They incorporated the business in 1998 but retained the partnership which charged the company rent for use of the business premises.

The original premises were in London N19; the taxpayers bought new premises in London N17 during 2001. They bought a four-bedroom residential house in June 1998 and sold it in June 2006.

The taxpayers said the residential property was used to house specialist staff employed in the printing business and the employees paid the market rent. The building was also let for two years to another printing firm V and had been used for storage by their own business.

They claimed business asset taper relief on the gain arguing that the property was an asset for the entire period they owned it. HMRC refused to allow the claim in full but agreed that business...