Peter Vaines reports on plant masquerading as art; excise duty on beer; HMRC acting fairly shock; private residence exemptions; & transfers of a going concern
The recent case in the Upper Tribunal of The Executors of Lord Howard of Henderskelfe deceased v HMRC [2013] UKUT 0129 was a surprise until you got into it.
The executors were claiming that a painting by Sir Joshua Reynolds—which had been sold for over £9m—was a wasting asset and, therefore, exempt from capital gains tax.
A wasting asset is one which has a predictable life of less than 50 years and, as this painting had been painted before 1776, one might imagine that the executors had an uphill struggle.
However, the argument was a little more subtle. The executors claimed that the painting, which was hanging in the public areas of Castle Howard, represented a genuine attraction to visitors, and should be regarded as plant and machinery. How did this help? Because s 44 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992), provides that plant and machinery is regarded as having a predictable life of
