Corporation Tax - 1930- 1959

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This page lists 5 cases, and was prepared on 28 October 2012.

Simpson -v- The Grange Trust Limited (1935) 19 TC 231
1935 HL Wright L	Corporation Tax	Casemap 1 Citers
	"An ordinary trading company assessed on the balance of its profits and gains for the year under Schedule D, Case I, is entitled, in order to arrive at the balance, to an allowance for outlays incurred for the purpose of earnings its profits: the companies or concerns enumerated in the section whose income is in the main taxed by deduction, would be placed at a disadvantage if no allowance was made to them for management expenses."
	Income Tax Act 1918 33(1)

Watson Brothers -v- Hornby (1942) 24 TC 506
1942	Corporation Tax	Casemap 1 Citers

Dale (HM Inspector of Taxes) -v- Johnson Brothers 32 TC 487
1955 Sheil J	Corporation Tax	Casemap 1 Citers
	(Year?) The taxpayer claimed an industrial buildings allowance against his tax liabilities for a warehouse used as storage as a trade in itself. Two thirds of the use was for storage of finished goods awaiting collection or delivery. The taxpayers were the sole selling agents for various manufacturers and were obliged under the agreement with them to store sufficient products to enable prompt delivery to be made to customers. They relied on s.8(1)(d)(iii) of the 1945 Act. Held: The claim was rejected. The trade carried on at the warehouse was not storage alone, but also the disposal of the goods as selling agents: "That Section, so far as it is invoked here, contemplates that the use of the building must be for a trade and that trade, so far as the use is concerned, must be a storage trade. It will not do that the trade is storage plus something else or something else plus storage. It must be simply a keeping or custody. When one considers the use of the two-thirds of this building it cannot be said that there was simply a keeping or custody in that part of it. The agreements required a constant active movement of the goods by the Respondents, a disposal of them by the Respondents "
	Income Tax Act 1945 8

Sun Life Assurance Society -v- Davidson [1956] Ch 524
1956 CA	Corporation Tax	Casemap 1 Cites

Sun Life Assurance Society -v- Davidson [1958] AC 184
1958 HL Lord Somervell, Lord Reid	Corporation Tax	Casemap 1 Cites 1 Citers
	The court considered the question of what was meant by the phrase 'expenses of management' Held: The phrase (s75) could be seen "as apt to cover the expenses which would normally be deductible in respect of its life assurance business if an assurance company carrying on life assurance business was assessed as a trade." Section 33(1) "makes it clear that some only of the expenses which would be deductible under Case I and the relevant rules are deductible under this special method." Lord Reid: "I do not think that it is possible to define precisely what is meant by 'expenses of management'. It has not been argued that these words have any technical or special meaning in this context. They are ordinary words of the English language, and, like most such words, their application in a particular case can only be determined on a broad view of all relevant matters…. looking to the purpose and content of the section it appears to me that the phrase has a fairly wide meaning so that, for example, expenses of investigation and consideration whether to pay out money either in settlement of a claim or in acquisition of an investment must be held to be expenses of management…. It seems to me more reasonable to ask, with regard to a payment, whether it should be regarded as part of the cost of acquisition, on the one hand, or, on the other hand, something severable from the cost of acquisition which can properly be regarded as an expense of management."
	Income Tax Act 1918 33(1) 75