All-weather racetrack — Whether capital expenditure on installation of track tax deductible as “plant” — Section 24 of Capital Allowances Act 1990 — Appeal dismissed
The appellant acquired the assets and business of a company that organised and promoted horse races at Lingfield Park Racecourse. The company had installed, alongside the existing grass course, an artificial all-weather racetrack comprising track drainage, “equitrack” surfacing and safety fencing. The appellant claimed that the capital expenditure on the installation of the all-weather track amounted to expenditure on “plant”, and was therefore tax deductible under section 24 of the Capital Allowances Act 1990. That claim had been refused by the Inland Revenue Commissioners, but was allowed on an appeal to the general commissioners. However, it was then refused on an appeal by the Crown in the court below. The judge found that, although the track passed the “business use” test, since it was to be used in carrying on the appellant’s business, it functioned as part of the premises of the racecourse and not as plant. The decision was appealed.
Held: The appeal was dismissed.
It had not been open to the general commissioners, on the facts found by them, to conclude that the all-weather track functioned as plant. The only reasonable conclusion, considering those facts and on a proper application of the “premises” test, was that the track functioned as premises used by the appellant for horse racing, as did the grass track. Its use, construction and nature were such as to lead to that conclusion. Although the all-weather track was not land in its natural state, because it was synthetic, and had a limited life, those features did not prevent it from functioning as premises: Gray (HMIT) v Seymours Garden Centre (Horticulture) (1995) 67 TC 401, Wimpey International Ltd v Warland (HMIT) (1988) 60 C 51 and Attwood (HMIT) v Anduff Car Wash Ltd (1997) 69 TC 575 applied.
David Milne QC and Elizabeth Wilson (instructed by Nicholson Graham & Jones) appeared for the appellant; Timothy Brennan QC (instructed by the solicitor to the Inland Revenue) appeared for the respondent.
Sally Dobson, barrister