FTT considers commencement of trade where set-up not fully complete (Wardle v HMRC)

Article summary

Tax analysis: Mr Wardle claimed Entrepreneur’s Relief (ER) in respect of a disposal of an interest he held in a business on 28 February 2020. If successful, a lower rate of capital gains tax (10%) would apply to the disposal. HMRC sought to deny this claim. The business was a waste-to-energy project located at Port Hull, which was structured through a partnership vehicle in which Mr Wardle held an interest. The First-tier Tax Tribunal (FTT) was required to determine when, if at all, the business was conducted on a commercial basis with a view to the realisation of profit. Judge Newstead Taylor held that the FTT was bound to apply the test articulated in Mansell v R&C Commrs [2006] Sp C 551 (Mansell) with respect to when a trade has commenced and the extent to which a trade must be set up prior to commencement. In applying Mansell, the FTT held that the set-up of a trade did not...