Legal expenses incurred by a professional in defending disciplinary proceedings are deductible from taxable profits.
Citations:
Times 12-May-1997, [1997] EWCA Civ 1627
Statutes:
Income and Corporation Taxes Act 1970 130(a)
Jurisdiction:
England and Wales
Citing:
Appeal From – McKnight (Inspector of Taxes) v Sheppard; Sheppard v McKnight ChD 21-May-1996
Legal costs and fines not deductible – insufficiently connected with trade. . .
Cited – Strong and Co of Romsey Ltd v Woodifield HL 30-Jul-1906
The company sought to deduct from its trading profits a sum expended paying damages for personal injuries to a visitor to the taxpayer’s Inn. The claim had been rejected.
Held: The company’s appeal failed. Lord Davey said: ‘I think that the . .
Cited – Mallalieu v Drummond HL 27-Jul-1983
The taxpayer was a barrister. To comply with Bar guidance on court dress, she wore, in court and in and to and from chambers black dresses, suits and shoes and white blouses. The clothing were perfectly ordinary articles suitable for everyday wear. . .
Cited by:
Appeal From – McKnight (Inspector of Taxes) v Sheppard HL 18-Jun-1999
The taxpayer sought to set off against tax some pounds 200,000 spent defending professional disciplinary proceedings. The House was asked whether this was ‘money wholly and exclusively laid out or expended for the purposes of the trade.’
Held: . .
Lists of cited by and citing cases may be incomplete.
Income Tax
Updated: 01 September 2022; Ref: scu.142023