In the name of art

Was promotional activity a trade carried out commercially?

The taxpayer was a tax attorney and counsellor at law. He also promoted his wife who was a concert pianist. He claimed to offset his expenses from his work as a promoter against his general income. HMRC refused on the ground that his promotional activities did not constitute a trade and were not undertaken on a commercial basis.

The taxpayer appealed.

The First-tier Tribunal accepted that the question of motivation was relevant to whether a trade was being carried on and whether it was commercial. The taxpayer believed that his business of promoting his wife could be commercial. He had agreed with her that if he funded the promotion business the fee generated would belong to him until he recouped his capital outlay. After that they would divide the fees equally. In addition he paid for advice from...