The FTT handed down its judgment in Scheckter v HMRC [2026] UKFTT 1280 (TC) on 3 September 2026.

The Key Facts and Questions

Mr Scheckter, a businessman and former Formula 1 driver, acquired farmland at Laverstoke Park in 1996 and commenced a farming business on that farmland in 2001. He appealed against closure notices issued by HMRC disallowing his claims for sideways loss relief for the 2007/08 to 2009/10 tax years.

The losses were derived from the trade carried on by Laverstoke Park Produce LLP (“the LLP”) which was incorporated in 2001 and in which Mr Scheckter was the principal member. Broadly, the trade of the LLP consisted of rearing animals, growing crops, dairy processing, and the sale of produce therefrom. The LLP made substantial losses in each of its accounting periods between 2002 and 2018.

In addition to the LLP, Laverstoke Abattoirs Ltd (“the Company”) was incorporated in 2005 with Mr Scheckter as the sole shareholder and director. Broadly, the trade of the Company consisted of the slaughter of animals, the processing and packaging of meat, and the sale of the produce. The Company made substantial losses in each of its accounting periods between 2006 and 2018.

There were four key questions for the FTT to decide:

1. Whether the LLP was carrying on a farming trade or a non-farming trade of which farming was a part (“the Farming Question”).

2. If the LLP was carrying on a farming trade, whether in each tax year the carrying on of that trade formed part of and was ancillary to a larger trading undertaking with the Company (“the Larger Trading Undertaking Question”).

3. Whether the trade of the LLP was carried on throughout the basis period for each relevant tax year on a commercial basis (“the Commercial Basis Question”).

4. Whether the trade of the LLP formed part of a larger undertaking with the Company, and the trade was carried on throughout the basis period for each relevant tax year with a view to the realisation of profits (“the View to Profits Question”).

The Farming Question

HMRC contended that the LLP was carrying on a farming trade. Mr Scheckter argued that the LLP was carrying on a non-farming trade of which farming was only a part. The FTT held that the LLP was carrying on a farming trade on the basis that (a) the predominant activities of the LLP were farming activities and (b) each of the non-farming activities carried on by the LLP had a close and facilitative relationship with the predominant farming activities.

The Larger Trading Undertaking Question

HMRC contended that a larger trading undertaking could not encompass more than one legal entity and therefore the LLP and Company could not form such an undertaking and, in any event, the farming trade of the LLP was neither part of, nor ancillary to, the Company. Mr Scheckter argued to the contrary on both points.

The FTT held that a larger trading undertaking could encompass more than one legal entity and that the farming trade of the LLP could and did form part of a larger trading undertaking with the Company due to the extent to which the activities of the two entities were interlaced. However, the FTT determined that the farming trade of the LLP was not ancillary to the Company in any of the tax years because the Laverstoke brand, which was owned by the LLP, was at the heart of the business of the two entities and the farming trade was the essence of the brand.

The FTT’s conclusion on this question alone was sufficient for Mr Scheckter’s appeal to fail. Nonetheless, the FTT went on to consider the Commercial Basis Question and the View to Profits Question in turn.

The Commercial Basis Question

HMRC contended that the trade of the LLP was not carried on throughout the basis periods for any of the relevant tax years on a commercial basis. Mr Scheckter contended that, while mistakes had been made in the carrying on of the trade, that trade had been carried on throughout the basis periods for each of the relevant tax years on a commercial basis.

The FTT held that the trade of the LLP was not carried on throughout the basis periods for any of the relevant tax years on a commercial basis because the LLP had allowed the Company to use the brand, which was its most valuable asset, for no consideration. This conclusion was obiter, but would also have been sufficient for Mr Scheckter’s appeal to fail.

The View to Profits Question

HMRC contended that the trade of the LLP did not form part of a larger undertaking with the Company and, in any event, the trade was not carried on throughout the basis period for each relevant tax year with a view to the realisation of profits. Mr Scheckter argued to the contrary on both points.

The FTT held that the trade of the LLP did form part of a larger undertaking with the Company and that the trade was carried on throughout the basis periods for each relevant tax year with a view to the realisation of profits.

Outcome

Mr Scheckter’s appeal in respect of sideways loss relief was dismissed.

A copy of the FTT’s judgment can be found here.

Aparna Nathan KC and Matthew Bignell appeared as counsel for HMRC.