Trade or property income

Trade or property income

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A client receives income from fishing on part of a river he owns.  He has made it clear it is not a hobby although the profits and losses are not significant.  All of the income is received through a charitable foundation that receives the money and takes commision off it.

As the Sa105 notes say that property includes 'leasing or licensing agreements over your land or property', would you lean more towards income from land?  That is more my conclusion at the moment!

Any replies appreciated.

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By vince8
21st Aug 2015 12:03

I would agree

Based on what you say and that he owns the land from which the fishing is done, not the river. If he decided to create a fishery and perhaps provide bait etc then maybe a trading issue would arise.

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paddle steamer
By DJKL
22nd Aug 2015 16:18

See PIM1060
PIM1060 - Income chargeable: sporting rights

Sporting rights include rights of fowling, shooting or fishing, or of taking or killing game, deer, rabbits, etc. Income from sporting rights is chargeable as property income, since income from allowing such activities comes from the recipient exploiting an interest or rights in or over land. It includes for example income from the grant of fishing licences and shooting permits.

Exceptionally, the commercial exploitation of the sporting facilities may amount to trading. In such a case the income from the sporting rights may be included in the trading computation. An Inspector should handle claims that income from sporting rights is trading income because of the level of commercial exploitation.

Income from sporting rights may be included as trading receipts in farming cases, provided that the amounts involved are small.

Profits from the sale of game etc. are only chargeable if the profits are trading profits. They are not rental business profits as they do not arise by virtue of an interest in or over land.

 

http://www.hmrc.gov.uk/manuals/pimmanual/PIM1060.htm

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By Steve Kesby
23rd Aug 2015 11:17

PIM1060,,,

,,, should be read in the context of BIM15065. The commercial occupation of land is deemed to be a trade, so you need to consider whether the client is occupying it commercially.

If the under-current of the question was is a river land, then the answer is yes.

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