Charlotte Macdonald v The Commissioners for HMRC
Decision date: 1 May 2025
Neutral citation: [2025] UKFTT 495 (TC)
Overall AI summary confidence: medium
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: medium
This appeal concerned whether sideways loss relief could be claimed for losses from a woodland shoot on the Bretby Estate and whether HMRC validly issued a s29 discovery assessment (2016–17) and s28A closure notices (2017–18 to 2020–21). The Tribunal found the Shoot was run commercially but not "with a view to the realisation of profits", and it was not part of a larger undertaking; HMRC's discovery assessment and closure notices were held to be valid. The appeals were 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: medium
From the judgment the clear ratio is that s66 ITA 2007 requires both an objective commerciality inquiry and a separate inquiry into whether the activity was carried on "with a view to the realisation of profits"; satisfying the commerciality limb does not automatically satisfy the view-to-profit limb. The "with a view to profit" limb is primarily a subjective question but may be displaced by objective evidence (eg prolonged consistent losses or lack of realistic prospect of profit). For discovery under s29 TMA, a discovery assessment can be lawful where, before the taxpayer supplied information in an enquiry, a hypothetical reasonable officer could not have been expected to be aware of the insufficiency of tax.
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 observed that a venture can still be commercial despite repeated losses if operated businesslike and seriously, but persistent long-term losses are a strong indicator against a genuine profit intention. It also commented that common ownership or shared staff alone do not prove separate activities form a single larger undertaking under s66(4), and that exceptional one-off costs may be relevant in distinguishing temporary adversity from an absence of profit intent.