Disposal of land and business

The taxpayer - Leeds Cricket Football and Athletic Co Ltd (LCFA) - owned the freehold to a cricket ground which it leased to Yorkshire County Cricket Club (YCCC). During the lease LCFA maintained the right to carry on hospitality catering and advertising.

In December 2005 LCFA sold the ground to YCCC. Afterwards to help ensure a smooth handover LCFA transferred client details and agreements of third parties. YCCC licensed back the catering business to the taxpayer for an annual fee.

The taxpayer said the transaction entailed the disposal land and the disposal of a business with attached goodwill. HMRC considered there was a disposal of land with attached income streams.

The First-tier Tribunal considered first whether LCFA’s activities before the sale had constituted a business. It considered it was - the income streams continued even when cricket was played at other grounds and the evidence showed...