Here’s an interesting tax story, set against the backdrop of a quiet Hampshire village called Overton. It features a former Formula One world champion, an organic farm and a lesson about who owns your brand.
A champion’s second act
In 1979, Jody Scheckter became Formula One world champion driving for Ferrari.
After retiring from racing, he built a second success: a weapons simulation business whose revenues passed £100m by the early 1990s.
In 1996, he and his wife Clare moved to England and bought Laverstoke Park, an estate on the edge of Overton. Over the years that followed, he invested around £55m of his own money into the estate and roughly 3,000 acres of surrounding land, with a vision of building an exceptional organic farm, buffalo herd and all.
Where the numbers stopped adding up
The farming business made a loss in almost every year it traded, and the partnership running it closed in 2024.
Those losses had been set against tax on Scheckter’s other income. HMRC challenged that, and the bill came to almost £1.46m. Scheckter appealed and lost.
The detail that matters to you
Tucked inside the judgment was a point that applies to anyone running more than one business.
The Laverstoke brand belonged to the farming partnership. A connected company used that brand to sell products and paid the partnership nothing for it.
The tribunal saw the brand as the partnership’s most valuable asset. Letting another business use it for free was one of the reasons it decided the partnership wasn’t operating on a commercial basis.
The appeal failed on other grounds as well. Even so, a proper licence would have closed off one obvious weakness.
“But they’re both my businesses…”
That’s a natural way to think. You built them, you control them and they’re working towards the same goal. In law, each business is a separate entity, and the arrangements between them deserve the same care you’d give a deal with an outsider.
The risk reaches well beyond tax. When you bring in an investor, part ways with a co-founder or prepare to sell, one of the first questions asked is who owns the brand and on what terms others use it. A vague answer at that point can cost time, money or negotiating leverage.
Three questions worth asking
- Who owns your brand? You personally, your trading company or another entity?
- Who uses it? Other group companies, franchisees, distributors or business partners?
- What’s agreed? Is there a written licence covering permitted use, quality standards, any fees and what happens when the relationship ends?
If you can answer all three without hesitating, you’re in good shape.
If one of them gave you pause, or you’d simply like to catch up about how things are going, get in touch. We’d be glad to hear from you, and where tax is part of the picture we’ll work alongside your accountant/tax specialist, or we can happily recommend one.
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Ryan has helped a vast number of businesses protect and control their intellectual property as well as drafting and advising on consumer and commercial contracts.
