Buying and selling businesses can be a highly complex matter and dispensing with legal formality is a positive invitation to trouble. The point could hardly have been better made than by a High Court case concerning the ill-fated purchase of a fish and chip shop which culminated in threats of violence.
Following informal discussions, a businessman had paid £160,000 for the business as nominee for the buyer, his brother-in-law. Although both buyer and seller had instructed solicitors, they deliberately kept them in the dark and showed little or no concern for the advice they gave. As a result, no agreement embodying the terms on which the shop was to change hands was ever signed.
The buyer and seller fell out within months of the buyer taking possession of the business. Issues arose as to the buyer’s continued use of the seller’s ...
In an encouraging case for the agricultural industry, a determined organic farmer has been granted the right to set off more than £1.4 million in losses, suffered over a five-year period, against tax due on profits he made in subsequent years. With the help of legal advisers, he achieved a tax saving of almost £600,000.
The farmer bought a 75-acre farm in 1995 and consistently made losses over the following 17 years. He lost £1,464,324 in the five tax years from 2008 to 2012, in part because of the financial crisis. However, by expanding the farm’s landholdings to over 400 acres and by specialising in organic produce and in selling directly to the public, he turned the business around and it had been profitable since 2012.
He had other business interests and had continued to pay farm workers generously throughout the ...
Fixed term tenancies, incorporating probationary periods, are a common means by which social housing providers weed out potential nuisance tenants and ensure that their housing stocks remain available to those who really need them. A High Court ruling gave guidance on how such tenancies work in practice.
The case concerned a woman who was granted an assured shorthold tenancy of a flat for a fixed term of seven years. The tenancy was subject to a 12-month ‘starter’ period, which could be extended to 18 months. The lease, which was in common form, contained a break clause which provided that, during the probationary period, the tenancy could be terminated on two months’ notice.
The landlord, a social housing provider, exercised the break clause and launched possession proceedings after receiving complaints of antisocial behaviour on the woman’s part. She pleaded that, by virtue ...
The distinction between an extension and an annexe is a fine one but, for charities, it can have crucial tax implications. The First-tier Tribunal (FTT) considered the issue in granting VAT exemption in respect of the construction of a new church hall.
There was no dispute that the hall was intended solely for charitable purposes. HM Revenue and Customs (HMRC), however, took the view that it was an enlargement, or extension of the adjoining church, and that its construction costs therefore did not qualify for zero rating under Section 30(2) of the VAT Act 1994.
In upholding the diocesan authority’s challenge to that ruling, however, the FTT found that the hall could properly be viewed as an annexe that was capable of functioning independently from the church. The relevant exemption in respect of building works and materials therefore applied.
The FTT noted ...