Tamzin Eyre & Ors v The Commissioners for HMRC
Decision date: 22 May 2025
Neutral citation: [2025] UKFTT 566 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned whether disposals of shares in PSSL qualified as material disposals of business assets for entrepreneurs' relief. The Tribunal found PSSL was not carrying on a trade in the relevant year though it was taking preparatory steps to develop property; because non‑trading activities (notably prior investment character, rental income and non‑trading debtors) were a substantial part of its activities, entrepreneurs' relief was refused and the appeals dismissed.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
A company’s status as a “trading company” requires a holistic qualitative and quantitative assessment of all its activities; preparatory acts (such as seeking planning permission and engaging architects) can count as activities carried on “for the purposes of” a trade the company is preparing to carry on, but such preparatory trading activity does not prevent non‑trading activities (e.g. significant rental income, prior investment character, substantial non‑trading debtors) from being treated as a substantial part of the company’s overall activities and thereby precluding the relief.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal noted that the activities of affiliated companies may be relevant contextually when a company’s purpose is unclear, while affirming that each company remains a separate legal entity for tax purposes; it also observed that failure to obtain planning permission does not automatically negate that preparatory activities were undertaken for the purposes of a forthcoming trade.
Warning
Evidence was unsatisfactory in parts (CP's evidence unreliable; accounts not audited), which complicated factual findings. The notes record that parts of the evidence were unsatisfactory (unreliable witness evidence and unaudited accounts), which complicated factual findings.