Eva Mary Butler & Ors v The Commissioners for HMRC
Decision date: 27 September 2023
Neutral citation: [2023] UKFTT 872 (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 Mrs Butler’s interest in Tufton Warren Farm LLP qualified for Business Property Relief or was excluded because the LLP’s activities consisted “wholly or mainly” of making or holding investments under s105(3) IHTA. The Tribunal found that, for the relevant period after Galloping Gourmet’s engagement, the Clock Barn wedding business was characterised primarily as hire/use of premises with key operational functions outsourced, and therefore the LLP was wholly or mainly holding property as an investment. The appeal was dismissed and BPR was refused.
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
Where a venue’s core fee is for the use of premises and customer contracts and payments describe the service as venue hire, that points to the activity being one of holding land/buildings as an investment; in assessing s105(3) a tribunal should evaluate each component of a composite business and the business as a whole over the appropriate period, and extensive outsourcing of event-management and catering to third parties can tip the balance to investment activity.
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 judgment adopts a spectrum approach to event venues—ranging from simple hire of premises (investment side) to fully serviced venues (trading side)—and indicates that provision of some customer-facing services (showarounds, basic advice, cleaning) does not necessarily prevent a business being mainly one of holding investments, especially where key operational roles are performed by others.