In 1913, one of the two pre-war trade years, payment was made to the Glenboig Union Fireclay Company of pounds 15,316, 11s. 4d. by a railway company as compensation in terms of the Railways Clauses Act 1845 for minerals left unworked for support of their line. The sum was entered in the revenue account of the Glenboig Company for the year in which it was paid, and on it the company paid income tax, A question having arisen as to whether this sum fell to be included in computing the ‘amount of the profits arising from the trade or business’ of the company in the pre-war year 1913, held ( aff. judgment of the Court of Session) that the sum in question was not profits within the meaning of the Finance (No. 2) Act 1915, it not being of the nature of an annual profit arising from trade, but money paid in respect of an asset of the company which had to that extent been sterilised and destroyed, and that accordingly it could not be included as profit in the company’s balance-sheet for the year 1913.
Lord Buckmaster, Lord Atkinson, Lord Sumner, Lord Wrenbury, and Lord Carson
[1922] UKHL TC – 12 – 427, [1922] UKHL 162 – 1, 59 SLR 162 – 1
Bailii, Bailii
Scotland
Income Tax
Updated: 05 January 2022; Ref: scu.632798
