Composite trade is not commercial

The taxpayer set up an equestrian business with two horses in 2004.  She began a new trade of asparagus farming for years later which she anticipated would return substantial profits even though it would be three years before the first harvest.

She claimed sideways loss relief under ITA 2007 s 64(1) and (2) in her 2008/09 self assessment return in respect of both businesses.

HMRC refused and the taxpayer appealed saying most of the losses related to the asparagus business which the Revenue had in effect ignored. She argued that the two ventures should be treated as separate from one another.

The First-tier Tribunal said the trade had to be commercial and carried on with a view to realising profits for sideways loss relief to apply.

The equestrian business made no money but bore the costs of keeping horses. It had the characteristics of being...