I have a partnership with my wife renting out owned properties in Brighton. We have eight properties, which are all debt free. We are considering incorporating, but this action is only sensible if capital gains tax can be deferred. We are held back by the fact that HMRC will not provide prior consent to deferment. We have read HMRC’s guidance in the Capital Gains Manual and Judge Berner’s five relevant tests. We also understand the importance of spending 20 hours a week or more on the business. But it all seems a bit subjective. We want to fully understand the risk and the extent to which we can eliminate it. 

Arthur Weller replies:  

You are referring to the Upper Tribunal case of Elisabeth Moyne Ramsay v Revenue and Customs in 2013 and HMRC’s Capital Gains Manual at CG65715. If you look at the court's official publication of the decision at paragraphs 12 and 13, you can see seventeen activities which were used to show that Mrs Ramsay was running a business. If your scenario is similar, you should not be overly concerned, and you should be able to claim incorporation relief with equanimity.