The custodians of Castle Howard, one of the country's most famous stately homes, have won tribunal case which means they will avoid paying CGT on the £9.4m sale of a painting by Sir Joshua Reynolds.

At an Upper Tribunal the judge ruled that the painting of Omai is a piece of 'plant or machinery' used to boost visit numbers to the house, which was featured in the BBC television series 'Brideshead Revisited'.

This decision means no tax is payable on the sale of the painting at Sotheby's in 2001 by the castle's present owner, Simon Howard. The picture, which shows one of the first Pacific Islanders to visit Europe, formed part of the estate of his father, Sir George Howard, who died in 1984.

Ever since the sale, Sir George's executors have been arguing over whether the proceeds should be subject to CGT. In the latest ruling, the judge said that since the painting was one of the main attractions for visitors, it did fall into the category of 'plant and machinery' as defined by the Taxation of Chargeable Gains Act 1992.

The judge agreed with the executors that the painting was part of the 'functional apparatus' used by the company in its visitor trade and should be classified as 'plant' under section 44 of the 1992 Act.

This means the painting is viewed as a 'wasting asset', even though its value continues to increase, a contradiction which the judge acknowledged, saying: 'I accept that there is something surprising in holding that an asset of high value, and one liable to appreciate in value, with a predicted life of more than 50 years, was a wasting asset.'

But the judge ruled that the wording of the 1992 act was clear and meant the painting was 'deemed' to be a wasting asset 'even though it would not otherwise be thought of' as such.

Lawyers for HMRC sought to argue that although Omai was 'no doubt greatly admired by visitors', its sale did not result in any drop in visitor numbers to Castle Howard, which in fact increased by 10% in the subsequent years.