Expenditure on refurbishment, decor and fittings in hotels was held to be plant though forming part of the setting of the hotels. The House considered the interpretation of undefined expressions in fiscal legislation, such as ‘trade’, ‘income’, ‘office’ and ‘plant’. Lord Wilberforce said: ‘It naturally happens that as case follows case, and one extension leads to another, the meaning of the word gradually diverges from its natural or dictionary meaning. This is certainly true of ‘plant.’ No ordinary man, literate or semi-literate, would think that a horse, a swimming pool, moveable partitions, or even a dry dock was plant-yet each of these has been held to be so: so why not such equally improbable items as murals, or tapestries, or chandeliers?’ and ‘There is no universal formula which can solve these puzzles. In the end each case must be resolved, in my opinion, by considering carefully the nature of the particular trade being carried on, and the relation of the expenditure to the promotion of the trade. I do not think that the court should shrink, as a backstop, from asking whether it can really be supposed that Parliament desired to encourage a particular expenditure out of, in effect, taxpayers’ money, and perhaps ultimately, in extreme cases, to say that this is too much to stomach.’
Judges:
Lord Wilberforce
Citations:
[1982] 1 WLR 322, (1982) 55 TC 251, [1982] UKHL TC – 55 – 252
Links:
Jurisdiction:
England and Wales
Cited by:
Cited – Shove (Inspector of Taxes) v Lingfield Park 1991 Ltd ChD 21-Jul-2003
The taxpayer, a race track owner, sought to claim the cost of laying an artificial all-weather race track surface as a capital allowance. The commissioners had found that it retained a separate identity from the grass, requiring maintenance and so . .
Cited – Lingfield Park (1991) Limited v Shove CA 31-Mar-2004
The taxpayers sought capital allowances on the costs of installing an artificial all-weather race track.
Held: The track was not either plant or machinery, and the taxpayer was not eligible for the relief. The only reasonable conclusion was . .
Lists of cited by and citing cases may be incomplete.
Corporation Tax
Updated: 08 June 2022; Ref: scu.185849