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A Salmon (TC3789)
The taxpayer bought a yacht which he hired out. He claimed he was in the yacht chartering and skippering business and sought losses arising from capital allowances against his other income.
He was unaware ITA 2007 s 75 precluded such a claim unless he spent half his time carrying on the trade.
HMRC raised discovery assessments to recover the tax after they realised the taxpayer did not meet the requirements of s 75.
He appealed saying his tax return contained sufficient information for the Revenue to have noticed the incorrect claim in time.
His description of his business as chartering and skippering made it clear there were two separate activities – which should have led the tax department to note that one activity chartering involved the mainly passive letting of a yacht on a bareboat basis and could not have satisfied s 75.
The...
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