The proprietor of a coach service wished to retire and in March 1990, he sold the freehold premises from which he traded, to a company which operated a local petrol station. The purchaser agreed to lease the premises back to him for three years and he continued to carry on the business for a further nine months until December 1990, at which point he sold the business. He claimed retirement relief on the sale of the business in December 1990 and on the sale of the premises in March 1990. The Inland Revenue accepted the claim for retirement relief on the sale of the business but not on the earlier sale of the business premises.
The High Court upheld the Inland Revenue’s ruling that the two sales could not be treated as one transaction and that the sale of the premises had not represented a sale of whole or part of the business.