The deceased died on 29 May 2012. At the time she was the sole beneficial owner of 30 acres of land (the land) used for carrying out a livery business. The business provided less than ‘part livery’ (ie day-to-day care being shared between the livery operator and horse owner) but more than ‘DIY Livery’ (ie a right to reside in a field plus a stable). For example the business provided worming products for the horses and hay feed during winter months.
The deceased’s personal representatives claimed BPR on the ground that the land was ‘relevant business property’ (IHTA 1984, s105) and/or APR on the ground that the land was ‘agricultural property’ (IHTA 1984, s116). HMRC issued a determination that neither relief could be claimed, and the estate appealed those determinations.
It was common ground that the deceased operated a business and there is property that could properly be described as ‘business property’ associated with and necessary for carrying on that business. The first issue was whether the business ‘consisted mainly of holding investments’. The second issue was whether the land was ‘agricultural property’.
- 1) The task of the tribunal was not to identify whether a trade was being carried out, but rather, whether the deceased’s business consisted mainly or wholly of making or holding investments in accordance with the plain words of the statute (IRC v George  WTLR 75 applied). The eventual outcome could not be dictated by simply looking at the comparative value to be attributed to the occupation of land when compared to the provision of services (if any) but must include such things as the subjective intention of the landowner, any manifestations on the part of the landowner as to whether the relevant land is being held purely as a long or medium term investment and what, if any, components of business activity existed (at the time of the deceased’s death).
- 2) It was completely artificial to compartmentalise activities on or associated with the land as either ‘investment’ or ‘livery’ activities. Many activities, such as fencing and repairs and pasture maintenance had a duality of purpose.
- 3) The business did not consist mainly of holding investments. The business was a genuine livery business, offering significantly more than the mere right to occupy a parcel of land. The provision of enhanced livery services which provided valuable services to the horse owners prevented it from being properly asserted that business was mainly one of holding investments.
- 4) The land did not consist of agricultural property. The evidence was that although from time to time a hay crop was taken from a hayfield, this had not happened for two years prior to the deceased’s death. Looking at the matter realistically this was not ‘agricultural activities’. Equine activities are not usually characterised as agricultural as a consequence of IHTA 1984, s115(4).