Sun Life Assurance Society v Davidson: CA 1956

The phrase ‘general management’ extended further than ‘management’ and included what was done at the lower levels of a company’s executive structure.
Romer LJ said: ‘The ratio decidendi of Golder’s Case (Capital and National Trust Ltd. v. Golder (H.M. Inspector of Taxes)) (1949) 31 TC 265, as it seems to me, was that the phrase ‘expenses of management’, as used in s. 33 of the Income Tax Act, 1918, means, in effect, the expenses of the managers of a company (who would normally be the board of directors) and not the expenses incurred by the company in the general management of its business ; in other words, the phrase is directed to the expenses involved in shaping policy and in other matters of managerial decision and does not extend to expenses subsequently and consequently incurred at lower levels of the company’s executive structure.’

Judges:

Romer LJ

Citations:

[1956] 1 Ch 524

Jurisdiction:

England and Wales

Citing:

AppliedNorman v Golder (Inspector of Taxes) 1944
The court considered the nature of allowable expenses for an investment company: ‘the notion behind this Section may be thought to be that the expenditure is something which if you were looking at the profits and gains under Schedule D would be . .

Cited by:

Appeal fromSun Life Assurance Society v Davidson HL 4-Jul-1957
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 . .
CitedAtkinson (HM Inspector of Taxes) v Camas Plc CA 6-May-2004
An investment company made an abortive attempt to take over another. It sought to set off against its Corporation Tax, the costs of the professional advice incurred.
Held: The expenses were deductible. . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax

Updated: 05 August 2022; Ref: scu.198421