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Update: personal tax and trusts

David Bird considers recent cases on business property tax relief, shares as consideration for a loan and residence issues, and the changes to HMRC interest rates

24 February 2009

Some of the more interesting recent developments relating to taxation on owners of businesses and private companies are about changes in business activity, the definition of business property, and consideration for shares in a business.

Change in business activity

Executors of D W C Piercy v Revenue & Customs Commissioners [2008] (SpC 687) involved the eligibility for business property relief (BPR) of shares in a company which had held property for the purposes of a property development business, but which had changed the way in which it carried out its business. HMRC claimed that the change in activity had the effect of changing the company from one which was trading to one which carried on an activity that amounted to the holding of investments.

The company had developed and sold residential flats during the 1950s and 1960s, but in the 1970s it decided to move into the commercial property market. However the company acquired some commerc...

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