Respondent building all-weather racetrack — Whether track constituting plant or premises for purposes of section 24 of Capital Allowances Act 1990
The respondent constructed an all-weather racetrack on its premises by digging out a deep trench that was serviced by a drainage system, and filling it with limestone chips that were covered with a layer of compacted limestone. The respondent maintained that the track formed part of its premises. The appellant contended that the track was part of the apparatus with which the respondent staged racing, with the effect that the price of its installation amounted to inexpenditure on plant or machinery for the purposes of section 24 of the Capital Allowances Act 1990.
At first instance, the general commissioners found for the respondent. They held that the track retained an identity separate from the grass racetrack and buildings at the racecourse so that it functioned as a plant, and not as part of the premises. The incorporation of the drains in its construction was held to be incidental.
The appellant appealed that decision. He maintained that the general commissioners had failed properly to address the question of whether the all-weather track functioned as part of the premises and had simply asserted that it was plant in the respondent’s business without identifying the nature of the business. Since the business was the entertainment of the public by staging horse races, and the races took place on the track, the track was therefore part of the premises within which the business activity took place.
Held: The appeal was dismissed
The all-weather track might have been separately identifiable from the other parts of the premises as a matter of visual inspection and through its construction and maintenance. However, this did not mean that it did not form part of the premises. Premises were not confined to buildings that serve the purpose of shelter or access: see Inland Revenue Commissioners v Scottish & Newcastle Breweries [1982] 1 WLR 322.
The all-weather track functioned as part of the premises in terms of the business. It was not a question of fact and degree, but a clear question of the meaning of the “premises test” as formulated by Lord Hoffmann in Wimpey International Ltd v Warland (HMIT) [1989] STC 273.
Timothy Brennan QC (instructed by the solicitor to the Inland Revenue) appeared for the appellant; David Milne QC and Elizabeth Wilson (instructed by Nicholson Graham & Jones) appeared for the respondent.
Vivienne Lane, barrister