Inland Revenue Commissioners v Korner: HL 19 Feb 1969

Income tax, Schedule D – D eduction – Farm ing – Maintenance, etc., expenditure on farm house – Whether expenditure for domestic purposes distinct from those of the trade – Income Tax A c t 1952 (15 and 16 Geo. 6 and 1 Eliz. 2, c. 10) 55. 124, 137(6) and (d) and 526(1).
The House was asked whether expenses in repairing and maintaining a farmhouse, the House of Elrig, could be set off against income tax. The farmhouse had twenty rooms, but only one was used for the farm.
Held: The expenditure could be set off in full. The test of whether property was such as could benefit from income tax relief as an agricultural property was that of the reasonable man.
Lord Upjohn said: ‘My Lords, the Special Commissioners in the Case Stated said that they were not satisfied that the House of Elrig was ‘the farmhouse’, within the meaning of the Income Tax Act 1952, of the land occupied for the purposes of husbandry by the Korner family. In its Case before your Lordships’ House the Crown said that it shared those doubts but was prepared to make the concession, so your Lordships are not directly concerned with the question. But I think it right to say that I am no more satisfied than were the Special Commissioners that this house could properly be described as ‘the farmhouse’ within section 526. This is a matter of fact to be decided in the circumstances of each case, and I would think that to be ‘the farmhouse’ for the purposes of the section it must be judged in accordance with ordinary ideas of what is appropriate in size, content and layout, taken in conjunction with the farm buildings and the particular area of farmland being farmed and not part of a rich man’s considerable residence.’
And ‘The result of . . Schedule D was that, apart altogether from s.526, the farmer occupying a house (no doubt with his wife and children) for the purpose of his farming activities would be entitled to claim a proportion of the reasonable and necessary expenditure upon the maintenance of his house as a deduction from his assessment to tax for the purposes of Schedule D. This practice is very old, works great justice between the Crown and the subject and I trust will never be disturbed. Thus speaking generally the grocer living above his shop, the doctor who has a surgery in his house and the barrister who works in his house where he keeps or brings his law books and works on his briefs in the evenings and at weekends is allowed by the Crown a reasonable sum in respect of the necessary upkeep of his dwelling as being properly attributable to his trading or professional activities.
So that in the present case there is no doubt, and indeed it is not disputed, for I did not understand the Solicitor- General for Scotland to challenge this proposition in his reply, that, apart from s.526, the respondents are, in any event, entitled to a proportion of the expenses, and it is agreed between the parties that this proportion should be one tenth .’


Lord Upjohn


[1969] 1 All ER 679, [1969] 1 WLR 554, [1969] UKHL TC – 45 – 287, 1969 SLT 109, [1969] 1 WLR 554, 45 TC 287




Income Tax Act 1952 124(1) 137 526


England and Wales

Cited by:

CitedLloyds TSB Private Banking Plc (personal representative of Rosemary Antrobus deceased) v Inland Revenue (Capital Taxes); Re Cookhill Priory (No 2) LT 10-Oct-2005
LT TAX – Inheritance Tax – agricultural property relief – agricultural value – agricultural property – farmhouses – whether house occupied by ‘lifestyle’ farmer could be farmhouse – held bid of such person could . .
CitedLloyds TSB Bank Plc (Antrobus Deceased) v Inland Revenue (No 1) SCIT 17-Oct-2002
SCIT INHERITANCE TAX – agricultural property relief – freehold house which was owned and occupied by the deceased – agreed that it was a farmhouse – whether it was of a character appropriate to the property – yes . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Scotland

Updated: 06 July 2022; Ref: scu.242348