Northern Ireland - Social Security and Child Support Commissioners' Decisions

 


[2005] NISSCSC C1_04_05(TC) (14 July 2005)

Decision No: C1/04-05(TC)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992
SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998
TAX CREDIT
Appeal to a Social Security Commissioner on a question of law from a Tribunal's decision dated 19 November 2003
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. This is an appeal by the claimant against the decision dated 19 November 2003 of an appeal tribunal sitting at Dungannon. The tribunal disallowed the claimant's appeal in relation to working families tax credit (WFTC). It decided that in respect of a claim dated 3 July 2000 the claimant had capital in excess of the prescribed amount which did not fall to be disregarded and this capital therefore barred the claimant from entitlement to WFTC. The capital in question consisted of a property No.47 F… Road and it was common case before me that the value of the property exceeded the WFTC capital cut-off limit of £8,000. It was also common case that No.47 could only be disregarded if it fell within paragraph 6(1) of Schedule 3 to the Family Credit (General) Regulations (Northern Ireland) 1987. The issue before me is therefore whether the tribunal erred in law in concluding that No.47 did not fall within the said paragraph 6(1). My decision is given in the final paragraph.
2. For purposes of WFTC the claimant and her husband are considered as one as regards capital. The background facts to the case were not in dispute. The claimant applied for WFTC on 10 July 2000. In November 1999 the claimant's mother had transferred farmland and buildings to the claimant and her husband. The buildings consisted of two cottages – No.35 and No.47 and 10 hectares of farmland which the husband farmed. Neither property was for sale. No.35 was disregarded for WFTC purposes as it was occupied by the claimant's mother. No.47 had been in a semi-derelict state. Prior to the date of claim the husband had spent a lot of time and money in renovating it with grant aid. It was rented out at the date of claim at £70.00 per week - £65.00 being paid by way of housing benefit and £5.00 from the tenant. The rates of £3.64 per week were also paid by way of housing benefit. Both cottages were situated on the farmland with access to fields and outhouses beside and around them. Rights of way onto the fields were through the driveways and past the cottages. The claimant's income was sufficiently low for WFTC to be appropriate if number 47 was disregarded. The cottages were held freehold without mortgage. The Department disallowed the claim for WFTC on the basis that the value of No.47 (No.35 being disregarded) exceeded the capital cut-off limit of £8,000 and it could not be disregarded under the WFTC legislation.
3. The claimant appealed. On appeal the tribunal disallowed the appeal giving the decision set out above. The tribunal concluded that No.47 was used separately from the land on which it was sitting and that it could be sold separately. It reasoned as follows:

"19. The main issue in this case was whether Appellant could have the capital value of No. 47 disregarded under paragraph 6 of Schedule 3 Family Credit (General) Regulations. However, as will be noted from above findings I also considered paragraph 1 of Schedule 3 and concluded for the reasons noted above, that No. 47 could, reasonably and practically be sold separately. Also, only one dwelling may be disregarded under paragraph 1.

20. None of the remaining paragraphs of Schedule 3 are in contention and I am satisfied that none are applicable.

21. [The claimant's husband] has become a self-employed farmer. The issue is whether the renting of No. 47 can be considered as part of the farming business, or, if this fails, can H [the claimant's husband] be regarded as self-employed in a rental business.

22. I have considered a 2 page submission prepared by a D P Eland, dated 10.03.2003, and unfortunately I did not find same helpful. In particular paragraphs 5 and 6 made sweeping submissions, gave no examples and recited no case law to assist.

[The Claimant and her husband] put forward forceful arguments for disregarding the capital value of No. 47 under paragraph 6, Schedule 3 of the Family Credit (General) Regulations.

The Family Credit disregards in Schedule 3 almost mirror the capital disregards for Income Support purposes. Unfortunately, the submission papers did not include paragraph 5 in the disregards. It refers to disregarding future interests in the property except those, for example, where the claimant has granted a tenancy. This provision was introduced to close a loophole whereby it was possible to have a simple tenancy agreement and the capital value then fell to be totally disregarded. This provision apart I considered paragraph 6 which is what Appellant relied on.

I considered the possibility that a letting may become a business, or, be a business depending on the circumstances of the case. Case law (per submission papers) indicates that a distinction has to be drawn between business assets and personal assets. If claiming that a particular asset is a business asset that [sic] it has to be decided if it is 'part of a fund employed and risked in the business'. It is difficult to appreciate how the letting in this case would fall into that interpretation.

By the time of the claim herein the new tenant had been in situ a reasonable time following substantial grant aided renovation work. Given the extent of the completed work the property would be relatively trouble free, the house was in good order, the tenant was not troublesome, the Housing Benefit was paid directly into Appellant's account with the tenant paying a small portion directly.

Whilst there was some little activity it is difficult to see how the extent of the landlord's involvement by the date of claim could be regarded as sufficient to classify the asset as a business asset, or integral part of Appellant's farming business, or something in which Appellant could be regarded as a 'self-employed earner', even if one had regard to the disregarded property also, and the property was not employed or risked in the business of farming or otherwise.

The income tax/accounting position did not help Appellant as the renting was dealt with/treated separately by the Inland Revenue and separate forms used. However, I did not believe that this alone would have been sufficient to prejudice Appellant's claim.

Taking all the circumstances of the case into account I very much regret that appeal has been unsuccessful as Appellant has not established, on balance of probabilities, that No. 47 falls to be disregarded within the meaning of paragraph 6 Schedule 3, or under any of the remaining paragraphs."

4. The claimant has appealed to me. The grounds of appeal have been set out on an OSSC1 form dated 27 March 2004 and amplified in further correspondence and at hearing. The claimant was represented in the appeal by Mr Hatton of the Law Centre (NI). The appeal was opposed, initially by letter received on 30 June 2004 and later in skeleton argument and submissions at hearing by Miss Tipples of Counsel instructed by the solicitors to the Commissioners of Her Majesty's Revenue and Customs (including what was formerly the Board of Inland Revenue), the respondent in the case. I am grateful to both representatives for their considerable assistance. The claimant did not attend the hearing but her husband did.
5. The grounds of appeal were fourfold and I summarise them with the submissions as follows:

Ground 1

That the tribunal had adopted an erroneous approach and had concluded that No. 47 could only be disregarded if its rental was part of the farming business or was a separate rental business. Mr Hatton submitted that the correct approach was to categorise the husband as a self-employed earner and then go on to categorise what duties or activities were involved in his self-employed business. So doing No. 47 would be an integral part of his self-employed business and the property could properly be considered to be "employed and risked in the business".

Mr Hatton cited and sought to distinguish decisions R(FC) 2/92 (a decision of a Great Britain Commissioner) and R7/82(SB) (a decision of a Northern Ireland Commissioner) from the present case. He submitted that those cases were authority for the proposition that the ownership of a simple tenanted house was not sufficient to constitute a business and that the appeals in those cases had failed because the level of activity by the appellants was insufficient to establish that they were conducting a business. Citing the case of Chief Adjudication Officer v Knight (reported as an appendix to R(IS) 14/98) and CCS/2128/2001 Mr Hatton put forward the proposition that the degree of activity in the business was a relevant factor. In the present case the husband's working day was divided between his duties as a landlord and his farming activities. In relation to his finances the revenue from rental, from farming and from his educational booklet business and other monies received by the family were all paid into the one account. The tribunal's distinction between farming and rental aspects was therefore unnecessary. It had adopted an incorrect approach. The correct approach was to consider the business as the activities which the claimant performed as a self-employed earner. If the activities taken as a whole were sufficient to establish that the claimant's business included both farming and rental aspects then No. 47 was clearly to be disregarded as a business asset.

The respondent opposed this ground. Miss Tipples submitted that the relevant authority was R(FC) 2/92. She submitted further that the tribunal had had regard to the relevant case law, had correctly analysed and construed the said paragraph 6(1), had made relevant findings and reached a conclusion based thereon which was not an unreasonable one. She submitted that in those circumstances a Commissioner was not entitled to set aside the decision of the tribunal. In support of that Miss Tipples cited the cases of Instrumatic Limited v Supabase Limited [1969] 1 WLR 519, CA at 521E-F, per Lord Denning; and Kahye v Secretary of State for the Home Department [2003] EWCA Civ 317

Ground 2

That the tribunal had failed to show what definition it gave to the business of farming.

Mr Hatton submitted that the tribunal had to determine what farming was and then proceed to determine whether the activity of renting the property was part of that definition. Two possible definitions of farming had been put to the tribunal and both this and the lack of a legislative definition made conclusions on what was constituted by farming necessary. Mr Hatton submitted that the renting of the property was part of the husband's diversified farm business.

Miss Tipples opposed this ground submitting that there was no need for the tribunal to attribute any definition to farming. The issue before the tribunal was to determine whether, as a matter of fact, No. 47 fell within paragraph 6 of Schedule 3 of the said Regulations. The determination of this issue did not require the tribunal to stipulate what definition it gave to the business of farming.

Ground 3

That the tribunal had made assumptions which were not based on any evidence.

Mr Hatton referred to a part of the tribunal's reasons:

"By the time of the claim herein the new tenant had been in situ a reasonable time following substantial grant aided renovation work. Given the extent of the completed work the property would be relatively trouble free, the house was in good order, the tenant was not troublesome, the Housing Benefit was paid directly into Appellant's account with the tenant paying a small portion directly."

Mr Hatton submitted that these findings (apart from those relating to payment of rent) were not based on evidence but were assumptions made by the tribunal. He submitted that the use of the phrase "would be" indicated that the tribunal had estimated that this was the situation. There was nothing in the record of proceedings to show that the tribunal had heard any evidence relating to the current tenant. There was evidence in the papers as to the work which the husband had done in renovating the property but no information as to the situation at the time of claiming. In fact the tribunal was mistaken in its conclusion, the true situation being that the property and tenancy required considerable work. Citing decision CCS 2128/2001 (a decision of Mr Commissioner Mesher in Great Britain) as authority for the proposition that it was possible that the amount of administration and/or activity involved in the renting of one property could be sufficient to establish self-employment in a business, Mr Hatton submitted that the tribunal should have ascertained the circumstances in which the current tenancy was conducted. The tribunal, in Mr Hatton's submission, had failed to do this and had made assumptions about how the tenancy would be conducted rather than how it actually was conducted. By reaching conclusions regarding this aspect, without considering evidence relating to same, the tribunal, he submitted, had erred in law.

Miss Tipples submitted that the tribunal's findings in relation to the "new tenancy" at No. 47 were made on the evidence before the tribunal. She referred to paragraph 4 to 7 of the tribunal's reasons for decision which are as follows:

"4. No. 47 was in effect a derelict property when inherited although it had been 'done up' in the 50(s)/60(s) and since then occupied by the same Tenant until in or about the late 90(s).

5. Appellant's husband had to go to great lengths to have the Tenant vacate No. 47.

6. [The claimant's husband] proceeded to renovate No. 47, grant aided, and the work was completed and a new Tenant in occupation from July 1999.

7. This tenancy continues."

Miss Tipples also referred to the application for WFTC and associated documents which were before the tribunal. These documents were a letter from the Northern Ireland Housing Executive dated 3 April 2000, information supplied by the claimant on a form dated 27 July 2000, the valuation of the property dated 21 February 2001, a letter by the claimant to the tribunal undated and date stamped as received in the Appeals Service (NI) on 14 June 2001.

Ground 4

That the tribunal erred in finding that No. 47 was not "part of a fund employed and risked in the business". In Mr Hatton's submission the tribunal was not entitled to this conclusion in that the husband risked total financial loss, negligence claims, personal injury claims and personal threats in relation to No. 47.

Miss Tipples submitted that in relation to this ground the claimant was seeking to re-argue the tribunal's findings of fact, which, for the reasons previously indicated it was not entitled to do. In addition Miss Tipples submitted that the tribunal was entitled to have regard to the issue of whether or not No. 47 was part of a fund employed and risked in the business in reaching its conclusion as to whether No. 47 was an asset falling within paragraph 6 of Schedule 3 and in support of this she cited decision R(SB)4/85.

6. As a preliminary matter I should mention that the grounds upon which I had granted leave to appeal were that an arguable issue appeared to arise as to whether the tribunal erred in concluding that the claimant's sole business was that of farming and in particular whether it had sufficient evidence on which to base its findings that as at the date of claim (3 July 2000) the extent of the claimant's activity in relation to the property No. 47 was such that it could not be regarded as an integral part of the business or businesses. I had expressly stated that this was without prejudice to the parties' rights to make submissions on the other grounds raised. At hearing I clarified with the parties that they were prepared to make submissions on the other grounds and as will be noted above they in fact did so.

7. Reasoning

The tribunal has set out clearly what it considers to be the issues in this case. It has stated at paragraph 19 that the main issue is whether the appellant could have the capital value of No. 47 disregarded under paragraph 6 of Schedule 3 to the Regulations. It also, however, considered paragraph 1 of Schedule 3 and concluded that No. 47 could reasonably and practicably be sold separately. It also concluded that only one dwelling could be disregarded under paragraph 1.

8. I set out hereunder the relevant legislation which includes regulation 29 and paragraphs 1 and 6 of Schedule 3. Regulation 29 reads as follows:

"29.-(1) For the purposes of Part III of the Order as it applies to family credit, the capital of a claimant to be taken into account shall, subject to paragraph (2), be the whole of his capital calculated in accordance with this Part and any income treated as capital under regulation 31 (income treated as capital).

(2) There shall be disregarded from the calculation of a claimant's capital under paragraph (1) any capital, where applicable, specified in Schedule 3."

Paragraphs 1 and 6 of Schedule 3 read as follows:

"1. The dwelling, together with any garage, garden, small agricultural holding and outbuildings, normally occupied by the claimant as his home including any premises not so occupied which it is impracticable or unreasonable to sell separately but, notwithstanding regulation 10 (calculation of income and capital of members of claimant's family and of a polygamous marriage), only one dwelling shall be disregarded under this paragraph.

…

6. The assets of any business owned in whole or in part by the claimant and for the purposes of which he is engaged as a self-employed earner or, if he has ceased to be so engaged, for such period as may be reasonable in the circumstances to allow for disposal of any such asset."

I consider that the tribunal was correct in its conclusion that paragraph 1 of Schedule 3 could not assist the claimant and that it was entitled also to conclude that No. 47 could reasonably and practicably be sold separately. It then moved to the consideration of paragraph 6. Paragraph 21 of the reasoning states (inter alia):

"… The issue is whether the renting of No. 47 can be considered as part of the farming business, or, if this fails, can H [the claimant's husband] be regarded as self-employed in a rental business."

6. It seems apparent from the remainder of the reasoning that the tribunal concluded that the renting of the property was not an integral part of the farming business and then proceeded to consider whether the rental itself could become or be a business depending on the circumstances of the case. It considered the distinction between business and personal assets and decided the letting was not part of a fund employed and risked in the business.
7. It considered also the extent of the activity in relation to No. 47 by the husband and reached the conclusion that the activity was relatively little. It concluded that this small amount of activity was insufficient to enable the asset to be classified as a business asset. It concluded also that it was not "something in which the appellant could be regarded as a "self-employed earner.""
8. I consider Miss Tipples to be correct in her submission that I am not entitled to disturb the tribunal's conclusions on factual matters unless same are unreasonable on the accepted evidence. However, Mr Hatton's first ground of appeal raises an issue not as to whether the tribunal was entitled to its conclusions on the facts as found but as to whether the questions asked by the tribunal were those raised by the statutory provisions. While therefore I of course accept the rationale of the Instrumatic and Kaye cases same may not be directly on point as regards that issue.
9. The legislation refers to the assets of "any business". That appears to refer to a business as an entity and to contemplate that one claimant could be engaged in several businesses. The legislation also refers to any business in which the claimant is engaged as a self-employed earner. It therefore contemplates a situation where a claimant can be owner of a business and not be engaged in it as a self-employed earner. Against that background it does not appear to me that the tribunal erred in considering whether the property rental was part of the farming business or was a separate rental business. The legislation seems to use the word "business" in an ordinary colloquial sense rather than to envisage the lumping together of what could be very diverse activities as one business because they are carried out by one person. I therefore consider there is no merit in the first ground of appeal and conclude that the tribunal was correct to approach the matter as it did ie to consider first if the renting of No.47 was part of the farming business and if not if it was part of a separate rental business.
10. I also consider that the claimant was entitled to conclude that the rental of No.47 was not part of the farming business. No. 47 was not used in farming and the tribunal was entitled to its conclusion that it could be sold separately from the farmland and other buildings. Mr Hatton has mentioned a diversified farm business. There may be activities so closely linked to farming itself that they can be so described. However, an activity does not become part of a farming business merely because it uses farm (or former farm) land and buildings. The owner of farm buildings and lands could for example use some to farm and other parts as a car park. I do not think in ordinary usage these would be described as one business but both would be making use of the assets i.e. the land and buildings. The tribunal here, was not required by the statutory provisions to set out what definition it gave to farming. It is clear that the tenant had no connection with the farming business and neither did the cottage which simply stood on the land and was not used in any way in connection with agriculture. I can find no error in the tribunal's approach and therefore no merit in ground two.
11. I come then to ground 3 which relates to whether or not the tribunal was entitled to its conclusion that the claimant's activity with regard to the letting of No.47 was not such that he could be regarded as a self-employed earner. From reading the reasons it is uncertain that the tribunal reached any conclusion as to whether or not the letting of a single dwelling could in law be regarded as a business. It appears instead to have moved directly to the question of whether or not the husband was engaged in the letting as a self-employed earner. However, by reliance on R(FC) 2/92, the issue has been raised in the appeal to me as to whether or not the letting of a single dwelling to a single tenant for domestic use can be regarded as a business. If it cannot be so regarded any determination as to whether the dwelling is the asset of a business or whether the claimant is engaged as a self-employed earner in connection with the letting is irrelevant. For those reasons I must consider first the question of whether the letting of a single dwelling can constitute a business.
12. The case of Knight does not seem to me to be relevant in that it was not dealing with what was meant by a business. In Knight there appeared to be no question that the farm partnership was a business. The question was whether or not the benefit claimant was engaged in it. Certainly the degree of activity was relevant to whether or not she was engaged. It was not considered in relation to whether or not the farm partnership was a business. Similarly R(FC)2/92 was not decided on the basis of the level of activity involved. It was decided rather on the basis of whether the letting of a single dwelling with its attendant responsibilities could ever come within the usage of business in the relevant legislation. I comment further on that case later.
13. In decision R7/82(SB) at paragraph 6 the Commissioner states: -

"Let me first deal with the meaning of the word "business". I consider that the carrying on of a business calls for some activity on the part of whoever carries it on, and that a man receiving a single rent cannot be said to be carrying on a business."

14. The legislation (paragraph 6(1)(a)(v) of the Supplementary Benefit (Resources) Regulations (Northern Ireland) 1987) required him to decide if the property in question was: -

"the assets of any business which is owned, in whole or in part, by a member of the assessment unit."

Mr Hatton is correct that the Commissioner approached the matter by indicating that a business required some activity. Obviously that is so. However the Commissioner did not go on to determine that greater levels of activity would automatically mean that a business was being carried on. Indeed at paragraph 6 he continues: -

"It may be possible to argue that a man who has the right to receive a substantial number of rents and occupies himself in collecting them and making arrangements about them might be considered to be carrying on a business. That, however, is not the situation here and I do not have to consider what the position would be if those were the facts."

The case was decided under different legislation which did not make separate provision relating to the existence of a business and the claimant's engagement in it. The legislation in this case does so. Decision R7/82(SB) is not therefore of assistance in this case.

15. The case of R(FC)2/92 has been cited to me by both parties. Mr Hatton seeks to distinguish it and Miss Tipples relies on it. R(FC)2/92, dealing with identical phraseology was a decision of Mr Commissioner Goodman in Great Britain. Commissioner Goodman stated:

"8. I should say first that the question of whether the claimant is to be treated as a "self-employed earner" i.e. "a person who is gainfully employed in Great Britain otherwise than in employed earner's employment" (Social Security Act 1975, section 2(1)(b)) is not for this purpose conclusively determined by the fact that the claimant has a certificate of exemption (under Section 7(6) of the Social Security Act 1975) from paying Class II contributions as a self-employed earner (see R(FC) 2/90 para.16). In any event the question on the facts is not so much whether the claimant is a self-employed earner as whether the dwelling house was to be treated as one of the "assets of any business" within paragraph 6 of Schedule 3, to the General Regulations (…).

9. As to that question, the appeal to the Commissioner (supported by a further written submission from the adjudication officer dated 24 October 1991) is on the basis that the tribunal did not properly explain their reasons for rejecting the claim that the dwelling house was a business asset. In paragraph 6 of that submission the adjudication officer says:

"Clearly, it is possible for property to be an asset of a business. There would be no dispute that a person owning several blocks of flats which are rented to tenants was engaged as a self-employed earner running a business, the flats being assets of this business. It is also possible, I submit, that a person who owns a single property and receives rent from a tenant of this property is engaged as a self-employed earner; equally it is possible that this person is not a self-employed earner. It is my submission that it is a question of fact as to whether, in any particular circumstances, a business is being run."

10. In my judgment that submission is too widely stated. The word "business" is not defined anywhere in the Social Security legislation, so far as I can see. However, the mere receipt of rent from a letting has been held in another context not of itself to be a "business", Bagettes v. G P Estates [1956] Ch. 290. CA Cf. Re. Wallis, ex. p. Sully (1885) 14 QBD 950. In Smith v. Anderson (1880) 15 Ch D 247 at 258-261 Jessel MR discussed the meaning of "business". At page 260-261 he said:

"There are many things which in common colloquial English would not be called a business, even when carried on by a single person, which would be so-called when carried on by a number of persons … for instance, a man who is the owner of offices, that is, of a house divided into several floors and used for commercial purposes, would not be said to carry on a business because he let the offices as such; but suppose a company was formed for the purposes of buying a building, or leasing a house, to be divided into offices, and to be let out, should not we say, if that was the object of the company, that the company was carrying on business for the purpose of letting offices, or was an office-letting company, trying it by the use of ordinary colloquial language? The same observation may be made as regards a single individual buying or selling land with this addition, that he may make it a business, and then it is a question of continuity. A man occasionally buys himself land, as many landowners do, and nobody would say he was a land-jobber or dealer in land. But if a man made it his particular business to buy and sell land to obtain profit, he would be designated as a land-jobber or dealer in land. … so in the ordinary case of investments, a man who has money to invest, invests his money and he may occasionally sell the investments and buy others, but he is not carrying on a business."

The actual decision on the facts of the case by Jessel MR was overruled by the Court of Appeal (1880) 15 Ch. D. 268 et seq. but without in any way impugning the definition of business given by Jessel MR.

11. In R(SB) 4/85 at paragraphs 9-12, the learned Commissioner considered the meaning of "business" in a context similar to the present one but he was not concerned with the particular type of problem that I have here and I do not find his remarks of assistance in the present context.

12. In my judgment however, using Jessel MR's definition of "business" by analogy, it cannot be said that the carrying of a business is constituted by the ownership by an individual of a tenanted house, the collection of the rent, the execution of repairs and the carrying out of other landlord's duties. For that reason, in my view, the tribunal are correct in law in saying in their reasons for decision, "The house is not a business, it is an investment and as such it's [sic] value falls to be included as a capital asset for family credit purposes." The tribunal had found the relevant facts and drawn their conclusion, which was a conclusion of law and was correct in my judgment. Consequently I do not accept that the tribunal erred in law and in my view its reasons were sufficient."

16. It appears that Commissioner Goodman in R(FC)2/92 was adopting the same approach as Jessel MR in the Smyth v Anderson case ie considering that "business" was being used in its ordinary colloquial usage. So doing Commissioner Goodman reached the conclusion that a person who owned a tenanted house, collected the rent from it, executed the repairs to it and carried out other landlord's duties with respect to it could not be carrying on a business as "business" was defined by Jessel MR. This does not appear to be dependent on the level of activity carried on by the claimant but on what is ordinarily understood as constituting a business.
17. There has been further comment in a decision by Mr Commissioner Mesher in Great Britain in CCS/2128/2001. Commissioner Mesher was there dealing with a case under the child support legislation as to whether the income from the rental of industrial units could be regarded as income from self-employment or whether it was unearned income. He referred to R(FC)2/92 as giving "helpful guidance" though the latter was concerned with whether a tenanted house constituted a business asset and therefore dealing with questions regarding capital rather than income. Commissioner Mesher states:

"The mere ownership of property and the receipt of rent and payment of expenses or liabilities would not constitute employment as a self-employed earner. That situation is more properly looked at as the ownership of a capital asset, which produces income. But there will come a point, depending on the circumstances of individual cases, at which the amount of administration and/or activity involved even in the letting out of a single property would amount to the carrying on of self-employment."

I do not regard Commissioner Mesher as purporting to give any definition to the word "business". His only reference to that is to refer with approval to R(FC)2/92.

18. R(FC)2/92 is a reported decision. It deals with identical Great Britain legislation. It is not binding on me but is entitled to considerable respect. Essentially that decision was saying that the above situation could not come within the meaning of business as used in the relevant legislation. That usage does not permit the categorisation as a business of the letting of one dwelling house to a single tenant for domestic use even with its attendant responsibilities. The issue of whether or not the tribunal had sufficient evidence to support its conclusions on the amount of activity being expended on No. 47 (the third ground) does not therefore have to be determined by me.
19. As regards the final ground. The house cannot be an asset of a business if the renting of it is not a business. I am somewhat reluctantly drawn to the conclusion that I must agree with Mr Commissioner Goodman following as he does "by analogy" the reasoning of Jessel MR in the Smyth v Anderson case.
20. The appeal is dismissed.

(signed): M F Brown

Commissioner

14 July 2005