Reddleman Properties Ltd v Commissioners for Her Majesty's Revenue and Customs

Facts

Reddleman Properties Ltd ("RPL") was incorporated in August 2000 by Mr Stuart Walker and his wife, who between them owned the whole share capital. In December 2000 it bought commercial premises at 15 Princes Street, Thurso, about three quarters of which was let to the firm of Reid & Fraser, in which Mr Walker was a partner; the remainder comprised two shops let to unconnected parties. In May 2002 it bought 92 High Street, Wick, again let entirely to Reid & Fraser, and in June 2003 a tourist information centre at John o'Groats let to Visit Scotland. In 2004 the firm incorporated as Reid & Fraser Ltd, owned by Mr and Mrs Walker, and the office tenancies passed to it. The tourist information centre was sold in February 2008; no further property was bought until June 2010 and March 2011. HMRC issued a closure notice on 7 September 2010 amending RPL's corporation tax return for the year to 31 December 2008 on the footing that RPL was a close investment-holding company under section 13A of the Income and Corporation Taxes Act 1988, raising the liability from £18,852.62 to £25,889.76. RPL appealed to the First-tier Tribunal, contending it existed mainly to make investments in land let to unconnected persons.