Mr A W Kerr/Grantham House v Commissioners for Her Majesty's Revenue and Customs
Decision date: 11 January 2011
Neutral citation: [2011] UKFTT 40 (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 Mr Kerr carried on a trade in the year to 5 April 2007 in relation to Grantham House and whether claimed trading losses were deductible. The Tribunal found a trade had commenced on the first public opening and that trading was carried on commercially with a view to profit, but some claimed expenses were not wholly for business use and required apportionment to reflect private living accommodation. The appeal was allowed in part, with losses permitted subject to deduction for private-use costs.
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 trade can begin when premises are opened to the public and trading activities take place (ticketing, advertising, accepting bookings), even if initial takings are nil, provided there is an intention and conduct consistent with trading; where claimed expenditure relates to identifiable private living accommodation it must be apportioned so only amounts wholly and exclusively for the trade are allowed.
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’s remarks that the distinction between preparatory activities and the start of trading is illustrated by the point at which a business “opens its doors,” and that advertising and securing repeat bookings are evidence of an intention to conduct a repetitive commercial activity, are presented as guidance rather than binding holdings.