Lockyer (Pawson Estate) - UK Upper Tribunal finds that an active business of renting out a vacation property was an investment business, as the services elements were not predominant

The UK Upper Tribunal has found that the renting out of a vacation property to a succession of vacationers for a weekend or week at a time constituted a business of holding investments rather than a non-investment business - notwithstanding that the property was actively managed and various ancillary services were provided.  The British statutory distinction is similar to that in ss. 95(1) and 125(7) between an investment business (subject to an exclusion for more than five full-time employees), and a business (such as an assisted living facility or health spa) where the level of services is much higher - so that this decision may be relevant in the Canadian context.

Neal Armstrong.  Summary of R&C Commrs v. Lockyer & Anor (for Pawson Estate), [2013] UKUT 050 (Tax and Chancery Chamber) under s. 95(1) - investment business.