An investment company sought to set against its liability to corporation tax, the various costs of taking over another company. They argued that as an investment company these were not costs of the purchase and could be set against tax.
Held: The phrase ‘expenses of management’ is an ordinary expression not made up of words which carry a recognised or technical meaning. The decision of the Commissioners was one of fact not law, and the court was not bound by them to that extent. The expenses referred to would be not costs of the purchase. Appeal allowed.
The Honourable Mr Justice Patten
 EWHC 1600 (Ch), Times 18-Jul-2003, Gazette 18-Sep-2003,  STC 968
Income and Corporation Taxes Act 1998 75(1) 130
England and Wales
Cited – Simpson (HM Inspector of Taxes) v The Grange Trust, Ltd HL 15-Mar-1935
Income Tax – Investment trust company not assessable under Case I of Schedule D – Claim for relief in respect of expenses of management – Income Tax Act, 1918 s 8
Wright L said: ‘An ordinary trading company assessed on the balance of its . .
Cited – Capital and National Trust Limited v Golder 1949
The court asked as a question of principle as to whether Parliament ever intended to allow capital expenditure to be deductible as an expense against income.
Held: ‘the expenditure is something which if you were looking at profits and gains . .
Cited – Sun 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 . .
Cited – Prudential Assurance Company Limited v Johnson (HM Inspector of Taxes) CA 13-Feb-1998
Life company’s management expenses were allowable against income under Sch D Case 1, but not allowable on income minus expenses basis. . .
Cited – Sargent v Eayrs 1973
Abortive expenditure on the proposed acquisition of a capital asset is usually capital in nature. . .
Cited – Hoechst Finance Limited v Gumbrell CA 1983
The issue was whether the appellant company, a member of an international group of trading companies, could recover as expenses of management a commission of 0.25% per annum it had to pay to its parent as the price of obtaining a guarantee for the . .
Cited – Edwards (Inspector of Taxes) v Bairstow HL 25-Jul-1955
The House was asked whether a particular transaction was ‘an adventure in the nature of trade’.
Held: Although the House accepted that this was ‘an inference of fact’, on the primary facts as found by the Commissioners ‘the true and only . .
Appeal from – Atkinson (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.
Updated: 20 January 2022; Ref: scu.184468