Lingfield Park (1991) Ltd v Shove

For capital allowances, an item qualifies as plant only if it functions as apparatus with which the trade is carried on, rather than as premises in or on which the trade is carried on. The court should identify the item, consider its use in the business and determine its function. Synthetic construction, limited life, physical attachment, removability and separate identity do not prevent an item from functioning as premises. An artificial race track that enlarges the area in which horse racing is conducted is premises, not plant.

Lingfield carried on the trade of organising and promoting horse races. It claimed capital allowances under section 24 of the Capital Allowances Act 1990 for expenditure on an artificial all-weather race track, including surfacing, foundations, drainage and fencing.

The General Commissioners allowed the claim. On the Crown’s appeal, Hart J allowed the appeal and held that the only reasonable conclusion was that the track formed part of the premises. This was Lingfield’s second appeal, raising whether the Commissioners were entitled to classify the track as plant and whether the premises test had been properly applied.

1. Disposition. The Court of Appeal unanimously dismissed the appeal.
2. Appellate standard. The issue on an appeal from the General Commissioners was whether, on the facts found and the correct legal principles, no person acting judicially and properly instructed could have reached their decision, or whether the decision was contradicted by the true and only reasonable conclusion from those facts. The decision was therefore not insulated as a mere question of fact and degree where the legal classification had been wrongly determined. This approach was stated in Gray v Seymours Garden Centre (Horticulture) (1995) 67 TC 401.
3. Plant and premises. The business use test and premises test provide the sound legal foundation for determining whether an item is plant. The court must identify the item, consider its use in the trade and ask what it functions as. The relevant distinction is between apparatus with which the trade is carried on and premises in or on which it is carried on. The principle was expressed in Wimpy International Ltd v Warland (1988) 61 TC 51 and applied in Anduff Carwash Ltd v Attwood (1997) 69 TC 575.
4. Application. The all-weather track was synthetic rather than land in its natural state and was not a building providing shelter or security. Those features did not prevent it from functioning as premises. Its purpose, use, construction and nature showed that it enlarged the racecourse space in which Lingfield conducted its trade. The track was no more separate from the premises than the grass racecourse. The ability to remove and resell the surface, or to identify it visually and by its construction, did not alter that conclusion.
5. The foundations, ancillary works and surface were properly treated as one unit for the purposes of the claim. On the facts found, the only reasonable conclusion was that the track functioned as premises, not plant, so the Commissioners’ decision could not stand.

1. Court of Appeal (Civil Division): Dismissed Lingfield’s second appeal and upheld the conclusion that the artificial track was premises, not plant.
2. High Court, Chancery Division: Hart J allowed the Crown’s appeal from the General Commissioners by order dated 11 July 2003, reported at [2003] STC 1003.
3. General Commissioners: Allowed Lingfield’s appeal and concluded that the all-weather track constituted plant for the purposes of the Capital Allowances Act 1990.