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Whether bartering can be a trade and its effect on claims to loss relief.
KEY POINTS
- HMRC is scrutinising sideways income tax loss claims.
- In the Kevin Johnson case a loss relief was made when there was no monetary income.
- Does the existence of barter income indicate a trade?
- As well as a trade this must be carried on with a view to a profit.
- The correct recording of income is important to justify claims to inheritance tax business property relief.
Recent tribunal cases show that HMRC has been scrutinising claims to sideways income tax loss relief. Such intense HMRC review has included rural businesses such as a tree surgery and woodmanship business – Kevin Johnson (TC4805). The Johnson case involved no monetary income but there was ‘barter’ income. The tribunal considered the impact of this on the taxpayer’s ability to offset tax losses sideways against other...
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